World oil supply rises by 500,000 bbl/day in January - IEA

10 February 2011 14:21  [Source: ICIS news]

LONDON (ICIS)--World oil supply increased by 500,000 bbl/day in January 2011 to 88.5m bbl/day on higher output of OPEC crude and natural gas liquids (NGL), the International Energy Agency (IEA) said in its monthly report issued on Thursday.

The IEA's report said the outlook for non-OPEC supply in 2011 had been nudged up 100,000 bbl/day to 53.5m bbl/day, on higher North American output. It added that non-OPEC supply in January remained unchanged from December at 53.0m bbl/day, as outages continued to constrain production.

OPEC crude oil supply scaled two-year highs in January, increasing 280,000 bbl/day month on month to 29.9m bbl/day, mainly due to new production from Iraq, the IEA added.

The agency said that crude prices had been propelled higher at end of January due to political unrest in Egypt, with Brent crude reaching $100/bbl on fears that the turmoil might disrupt Suez Canal and Sumed pipeline flows or spread in the region.

"Recent political upheaval in Egypt has cast a spotlight on the country’s importance as a global thoroughfare for oil traffic, linking Europe to the Middle East and Asia," the IEA said.

"Flows through the Suez Canal and the SUMED pipeline are reportedly unaffected by the unrest. In the case of a disruption to the Canal, spare capacity for northbound crude is available on the SUMED pipeline, but freight times and costs would increase if vessels were forced to transit via the Cape of Good Hope," it added.

Global oil demand for 2011 was estimated to increase to 89.3m bbl/day, up 1.7% or 1.5m bbl/day year on year, on higher-than-expected demand in Asia and improved economic prospects for North America.

Projected OECD oil demand was adjusted up by 90,000 bbl/day for 2011, due to demand growth in December 2010 driven by industrial and transportation fuels, while non-OECD oil demand was projected to grow 3.7% year on year or 1.6m bbl/day to 43.2m bbl/day in 2011, following higher demand readings in Asia.

Meanwhile, the report said that global refinery crude throughputs for the fourth quarter of 2010 were adjusted up by 150,000 bbl/day, to 74.7m bbl/day, 2.4m bbl/day above the same quarter a year prior, based on higher data from the US, Chinese and India for the November-December period.

Global runs were expected to rise to 74.8m bbl/day in the first quarter of 2011 as maintenance in Europe, the Former Soviet Union (FSU) and the Middle East partly offset higher Chinese and Latin American runs, the IEA said.

($1 = €0.73)

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