| Add RSS Feed

Oil & Gas Journal

The group lowered its forecast for non-OPEC supply growth in 2008 to 700,000 b/d, with production reductions in Mexico, Norway, UK, Denmark, Australia, New Zealand, Brazil, and Russia to be partially offset by increases in India, Syria, and Chad. Growth in OPEC NGLs and nonconventional oils now stands at 340,000 b/d in 2007 and 540,000 b/d for 2008.

In April, OPEC crude production averaged 31.7 million b/d, a decline of 393,000 b/d from the previous month due to production disruptions in Nigeria and Iraq. Demand for OPEC crude in 2007 was estimated to average 32 million b/d, an increase of 280,000 b/d over the previous year. In 2008, the demand for OPEC crude is expected to average 31.8 million b/d, or 120,000 b/d lower than in the previous year.

OPEC said it continues to produce 32 million b/d, and its excess capacity has grown to more than 3 million b/d. "The start-up of new projects, such as the 500,000 b/d Khursaniyah field in Saudi Arabia, should help to further ease market fundamentals," the report said.

The cartel also said, "The surge in crude oil prices since the start of this year has not been equal across all crude grades. While light, sweet West Texas Intermediate has increased by more than $24/bbl, heavy grades have risen by much less, resulting in a widening differential between light sweet and heavy sour crudes."

(Online May 19, 2008; author's e-mail: samf@ogjonline.com)