Demand for OPEC’s crude will be higher in the second half of the year than previously estimated as inventories in developed economies remain depleted, according to the International Energy Agency.
The Organization of Petroleum Exporting Countries will need to provide an average of 30.7 million barrels a day in the second half, or 800,000 a day more than it pumped last month, the IEA said today. This calls for 140,000 more barrels of OPEC crude than the IEA forecast in April as stronger-than-expected demand has kept stockpile levels “tight” in advanced nations, the agency said. OPEC controls about 40 percent of global supplies.
“Forecast balances call for a significant rise in OPEC production from current levels for the second half of the year,” the Paris-based adviser to oil-consuming nations said in its monthly report. “While OPEC has more than enough capacity to deliver, it remains to be seen whether it will manage to overcome the above-ground hurdles that have plagued some of its member countries lately.”
Brent crude futures have been steady this year, trading near $110 a barrel in London today, as concern that the crisis in Ukraine may lead to a disruption in Russian energy supplies, and the protracted disruption to Libyan exports, are countered by slowing economic growth in emerging nations such as China.
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