OPEC reduce demand for their crude due to external supply

Organization of Petroleum Exporting Countries (OPEC) has reduced its outlook supply for 2011 due to increased external production from other outside groups, according to the most recent OPEC monthly report.

In the report, OPEC has predicted that 28.8 million barrels of oil a day will be consumed globally by its 12 members next year, which is 100,000 barrels less than was predicted last month.

"Mexico, Oman and Equatorial Guinea encountered minor upward revisions," OPEC's Vienna-based secretariat said in the report. Global consumption may weaken during the rest of this year because of "the severity of the economic crisis and its prolonged impact on the world economy."

The report suggests that producers outside of OPEC will produce 52.42 million barrels a day, an increase of 360,000 barrels a day.

Due to a rise in production of oil in Asia, Latin America and the Middle East, OPEC anticipates global oil growth in 2011 will be 1.05 million barrels a day, which equates to a 1.2 percent increase. Given the increase consumers will require 200,000 more barrels a day from OPEC next year, even after this month's lowered expectation.
The 12 OPEC members produce more than a third of the world's oil supply.

OPEC's 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The organization's next meeting is scheduled for 14 October in Vienna.

Oil futures traded around $75 a barrel in New York today, after climbing 78 percent last year.

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