The need to increase OPEC oil supply is growing stronger to avoid a decline in global stocks due to a strong rise in demand, the International Energy Agency (IEA) warned on Friday.
This organization, which serves an advisory role for 26 of the world’s most industrially developed countries, stated that it is closely monitoring movements in global financial markets, shaken by the crisis in the U.S. subprime mortgage market, and their potential impact on global oil demand. In its monthly report on global oil markets, the IEA reiterated its earlier call for the Organization of the Petroleum Exporting Countries (OPEC) to increase its production at its meeting in September in Vienna. “OPEC is taking quite a risk if it wants to maintain market balance and avoid a supply crisis,” the IEA report states.
The IEA further emphasizes that demand in 2008 will increase by an average of 2.2 million barrels per day, which is the same as its previous estimate published in July, and more than this year’s 1.5 million barrels per day. Oil demand next year is expected to average 88.2 million barrels per day, the agency reported. The increase in demand will raise the need for OPEC oil in 2008 by 700,000 barrels per day, to 32.1 million barrels per day. This is 200,000 barrels per day less than the IEA’s estimate published in July. “With risks related to supply from non-OPEC countries and the situation with global demand, which is uncertain, the chances of excessive supply seem very low if OPEC decides to increase production,” the IEA points out. (H)
