IEA reports on world oil output

The International Energy Agency cut its estimate for world oil demand growth this year, saying mild weather and high prices were weighing on demand in the most important consuming regions.
In its latest monthly oil market report, the Paris-based IEA said it now expected world demand for oil to rise by 1.25 mm bpd this year, down from a previous projection of 1.47 mm bpd. In outright terms, the IEA expects demand to average 84.83 mm bpd in 2006, up from 83.59 mm bpd in 2005.

The downward revision to demand growth was mainly attributable to a weaker picture of US demand than had previously been implied by preliminary weekly data and high exports from the former Soviet Union, which have had the effect of reducing apparent demand.
"Although the global economy posted strong growth in the first quarter of 2006, mild temperatures and high prices weighed on demand in most key consuming areas," the IEA report said.

The agency made little change to its forecasts for demand in China, the world'ssecond-largest oil user, where consumption is expected to grow by 5.3 % to an average of 6.93 mm bpd in 2006.
On the supply side, the IEA estimated world oil supply at 85.1 mm bpd in April, up 485,000 bpd from April. Output increases of 100,000 bpd or more came from OPEC, the FSU, Africa and North America, partly offset by lower North Sea volumes due to offshore field maintenance.

OPEC crude production rose t0 30.04 mm bpd in April from 29.87 mm bpd in April, the IEA said, mainly on the back of higher output from Iraq and Nigeria. Output by the ten OPEC members bound by a collective output ceiling of 28 mm bpd was 28.02 mm bpd, down marginally from 28.06 mm bpd.
For 2006 as a whole, the IEA expects non-OPEC production to rise to 50.1 mm bpd, up 1.18 mm bpd from last year, an increase of 30,000 bpd from its previous forecast.

Production from Russia, the biggest non-OPEC producer, is estimated at 9.62 mm bpd in April, and "seems to have recovered modestly from the weather-related disruptions seen in January and February," the IEA said. Russian output is expected to grow by 2.5 % this year, the report said, down from a growth rate of 2.7 % in 2005 and a much higher average annual rate of 9 % between 2000 and 2004.
As a result of the downwards revisions to demand this year, the IEA reduced its 'call' on OPEC crude and stocks for 2006 to 29.2 mm bpd, down 200,000 bpd from its previous projection and some 840,000 bpd below the cartel's estimated output in April.