OPEC sees non-OPEC supply cutting into its market share
LONDON -- OPEC members said Tuesday that demand for their oil in 2013 will be 100,000 bopd lower than previously forecast as growing output from non-member countries, particularly North American shale oil, eats into their market share.
The Organization of Petroleum Exporting Countries cut its forecast of demand for its oil this year in line with its revised expectation that non-members will produce an extra 100,000 bopd, compared with last month's forecast. Its outlook for overall global oil demand remained unchanged.
For 2013, non-OPEC supply is expected to grow by 1 million barrels a day in total, due mainly to production in the U.S. where output is forecast to hit its highest level since 1985, OPEC said.
Analysts have questioned whether the producer group can maintain its historic dominance of the oil market amid a boom in oil production in the U.S. due to the introduction of shale-rock drilling technology. A landmark study published by the International Energy Agency in October forecast that by 2020 U.S. oil output could overtake OPEC's biggest producer, Saudi Arabia.
Demand for OPEC's own oil is now expected to fall to 29.7 MMbopd in 2013, compared to 30.1 million MMbopd in 2012.
However, the producer group also highlighted the stumbling blocks that still face the oil industry in the U.S., not least the high rates of decline in production associated with the type of wells being drilled there.
"The risks associated with the US supply forecast remain high and careful follow-up of current production data is required in order to re-evaluate the projections as the year progresses," it said.
Dow Jones Newswires