Oil demand to see modest rebound in 2010
GLOBAL oil demand will rise by 1.7%, or 1.4m b/d, to 85.2m b/d next year, according to the IEA
Forecast consumption this year remains unchanged, down by 2.5m b/d (2.9%) compared with 2008. Next year's rise will largely be the result of a rebound in Asian demand. World oil production in June was 81.87m b/d, a rise of 70,000 b/d from May.
Meanwhile, higher-than-expected Russian output should push up non-Opec supply this year by about 190,000 b/d – 330,000 b/d more than the IEA previously forecast. Total non-Opec production in 2009 will now be 50.8m b/d. In 2010, new output from Azerbaijan, Brazil, the Canadian oil sands and the US Gulf of Mexico should bump that up to 51.2m b/d.
Opec's discipline with quota cuts announced last December seems to be wavering. The cartel's production rose in June by 75,000 b/d to 28.7m b/d – the second consecutive monthly rise. The IEA says compliance is now 68%, having peaked at around 85% earlier this year. The agency notes that "the near doubling of oil prices over the past four months appears to have weakened the resolve of some members to adhere closely to output targets."
Iran, Angola and Qatar seem to be the main cheaters, posting monthly rises in output. And higher Opec supply comes despite falling Nigerian production. An escalation of attacks from militants in the country has reduced output by 300,000 b/d. In total, Nigeria has lost 1m b/d on account of the violence.