OPEC trims global forecast ahead of summit

OPEC predicted that demand for its crude would fall by 1.4 per cent next year to 28 million barrels per day (bpd), trimming its forecast ahead of a ministerial meeting in Vienna next month. The revision was minor, but it could still inflame divisions within the oil exporters' group that are resurfacing as member compliance with pledged production cuts continues to slip. The group pumped 28.685 million bpd last month, based on its assessment of data from outside sources, as the 12 OPEC members increased their total output for the fourth month in a row. Excluding Iraq, which is not bound by a quota, OPEC members on average pumped 5.4 per cent above their output targets last month.

In a series of announcements late last year, the group pledged a record 4.2 million bpd of production cuts, of which less than 70 per cent are being delivered. "Compliance is necessary," Shokri Ghanem, the head of Libya's National Oil Company, said last week, suggesting that Arab OPEC ministers could take a hard line on group discipline at the September 11 meeting. Mr Ghanem, the de facto Libyan oil minister, was OPEC's president last year.

This year, the group's rotating presidency is held by Jose Botelho de Vasconcelos, the oil minister of Angola, who has been pressing for a higher OPEC output quota for his country. The group now expects the world will need it to pump 100,000 bpd less crude next year than it predicted a month ago. It forecast a marginal rebound of 500,000 bpd in global oil demand, which would be offset by a projected 500,000 bpd increase in its members' production of "condensates", which are petroleum liquids excluded from OPEC quotas. In addition, crude oil production from outside OPEC would rise by 300,000 bpd next year, according to the OPEC secretariat's latest monthly forecast.