OPEC reports on oil output

Sep 21, 2001 02:00 AM

OPEC continued to surpass its oil output targets in August, producing 24.86 mm bpd against a quota of 24.2 mm bpd, the group said in its monthly oil report. Including Iraq, which is under UN sanctions and doesn't participate in OPEC output agreements, OPEC pumped an average of 27.67 mm bpd in August, a 626,000-bpd increase over July.
OPEC cut output targets by 1 mm bpd effective Sept. 1, and oil analysts didn't expect the group to trim production before the new targets took effect. Meanwhile, OPEC has again cut its forecast for 2001 world oil demand by 90,000 bpd to 76.35 mm bpd. Global demand for crude is now expected to rise by only 640,000 bpd, or 0.8 %, on the year, said the report.
The report was prepared before the Sept. 11 terrorist attacks in New York and Washington, which were followed by steep plunges in world equity markets and lowered estimates for economic growth and crude demand. The attacks "are likely to have significant implications for the world economy and hence may affect this month's analysis of the world oil market," the report said.

OPEC met in September to review output policy. The group is said to be debating whether to reverse its latest output cut, but a consensus has yet to emerge, sources said. The 10 OPEC members who participate in output agreements overshot their official quotas by 666,000 bpd in August, compared with 581,000 bpd in July, the report said.
Meanwhile, demand for crude in 2001 is expected to rise by only 20,000 bpd in the Organization of Economic Cooperation and Development, 350,000 bpd in developing countries and 270,000 bpd in other regions. Within the OECD, demand in North America is seen growing by 90,000 bpd in 2001, and shrinking in Western Europe and Pacific countries in the OECD.
Oil demand growth is expected to recover in 2002, but not as much as earlier estimates. OPEC now expects global crude demand to reach 77.36 mm bpd next year, compared with a previous estimate of 77.47 mm bpd. Economic conditions around the world continue to deteriorate, with a sharp rise in US unemployment in August and new estimates of a 3.2 % contraction in Japan's gross domestic product. Economic growth in the euro zone is also slowing, but the regional economy is still expected to grow by 0.1 % in the second quarter.

Non-OPEC supply estimates have been raised by 10,000 bpd to 46.3 mm bpd for 2001, said the report. Non-OPEC output is now expected to rise by 520,000 bpd on the year. For the second quarter, world oil supply exceeded demand by 900,000 bpd.

Source: Dow Jones
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