New York The International Energy Agency cut forecasts for oil supplies from outside the Organisation of Petroleum Exporting Countries (Opec) this year because of lower exports from Sudan and Syria, cautioning that reduced spare output capacity raises the risk of a price surge.
Producers outside Opec will provide 53.5 million barrels a day this year, or 200,000 a day less than the IEA forecast last month. The agency kept
estimates for global oil demand in 2012 unchanged, predicting fuel use will remain "stunted" by the economic slowdown and higher prices. Disappointing non-Opec output will make the market more reliant on a "slim buffer" of spare production capacity from a few Opec nations, the IEA said.
"A real risk of another year of underperforming non-Opec supply shines a spotlight once more on Opec spare capacity," the Paris-based agency said in its monthly market report yesterday. "Non-Opec output should recover as 2012 progresses. Until then, the market's relatively slim ‘buffer' suggests a bumpy ride in the months ahead."
Supplies from non-Opec nations, responsible for about 60 per cent of the global total, were cut by 750,000 barrels a day in the first quarter amid fighting in Yemen, outages in the North Sea, sanctions against Syria and the transit dispute between Sudan and south Sudan. That leaves customers more dependent on Opec's effective spare capacity, which at 2.75 million barrels is close to levels that can cause a "sustained rise" in prices, the agency said. The figure excludes Iraq, Nigeria, Libya and Venezuela.
Brent crude traded at almost $126 a barrel yesterday in London, having advanced 17 per cent this year. Prices soared to a record $147 in July 2008 as unused capacity in Opec narrowed. South Sudan disputes have removed about 350,000 barrels a day from global markets, the IEA estimates. In Syria, attacks on oil infrastructure will cut output by 30,000 barrels a day, and in Yemen production fell to 160,000 barrels a day in the first quarter, the IEA said.
Oil inventories held by companies in developed economies stayed below their five-year seasonal average for a seventh month, according to the report. Stockpiles in industrialised nations increased by a ‘muted' 13.6 million barrels to 2.6 billion in January. That's equivalent to 57.8 days worth of consumption, the IEA estimates.
"Inventories, notably crude in Europe and the Pacific, look very tight," the agency said.