LONDON (ICIS)--Projected crude oil supply growth from nations outside the Organization of the Petroleum Exporting Countries (OPEC) bloc in 2014 has been revised up to 1.37m bbl/day on the back of strengthening production in the US, Canada and Brazil, OPEC said in its monthly report on Thursday.
“The anticipated strong output increase from OECD Americas lies behind this, supported by projected growth in the US and Canada, where the highest growth among all non-OPEC countries is expected in 2014,” OPEC noted in its report.
The forecast growth, a 60,000 bbl/day increase on OPEC’s last estimate, comes in spite of weakening Norway, Mexico and UK supplies, OPEC added.
OPEC crude oil production in March was estimated at 29.61m bbl/day, down by 630,000 bbl/day from February.
OPEC noted a $1.23/bbl drop in its reference basket of crude oil prices in March, to an average $104.15/bbl, on the back of the slowing pace of economic growth in China, lower refinery demand and ample supply. These drivers outweighed the influence of supply disruptions and geopolitical tensions on tightening prices, OPEC added.
The group revised down estimates for global economic growth in 2014 to 3.4%, below the IMF’s latest estimates, driven by a projected 0.2 percentage point drop in China’s GDP to 7.5% compared to 7.7% in 2013. OPEC’s estimate of 2013 global economic growth remains at 2.9%.
Global oil demand estimates also held steady at 1.14m bbl/day growth, to average 91.2m bbl/day. However, estimates of OPEC crude demand for 2014 were revised down by 100,000 bbl/day to average 29.6m bbl/day, representing a 400,000 bbl/day decline compared to 2013.
OPEC NGL production is forecast to average 5.95m bbl/d in 2014.
“The global crude market lost momentum over the month, impacted by concerns over a slowdown in China’s economic growth, lower demand and ample supply availability, despite ongoing production outages in Libya and geopolitical tension in Ukraine,” OPEC said.
Oil markets in the Atlantic Basin have weakened since mid-March on the back of reduced US heating fuel demand, while Europe has also softened as a result of reduced export opportunities. Sluggish performance for heavier crude distillates in Asia outweighed a demand recovery for lighter blends in the region, OPEC added.
OPEC said: “Global product markets are expected to receive support from gasoline demand, not only from the ongoing recovery in consumption in the OECD region, but also increasing demand growth in Asia.
“Factors driving the improvement in the OECD have been the better-than-expected growth in the US economy, increasing US car sales, and the European economies’ return to growth.”