OPEC reduced forecasts for the amount of crude it will need to supply by the most in at least three years as surging North American shale output reduces reliance on the group’s supplies.
The Organization of Petroleum Exporting Countries expects it will need to pump an average of 29.2 million barrels a day of crude next year, 200,000 a day less than it forecast a month ago. The group boosted estimates for supplies from countries outside OPEC by the same amount. The change implies that OPEC’s 12 members would need to cut output by about 1.1 million barrels a day from the 30.3 million they produced in August.
Brent crude futures declined below $100 a barrel on Sept. 8 for the first time in 14 months amid constrained global consumption, swelling U.S. output and speculation that threats to supply in Iraq, Libya and Russia are fading. U.S. crude production will surge to a 45-year high next year, lowering prices and reducing the need for imports, the nation’s Energy Information Administration said yesterday.
“Supply concerns appear to be receding, as geopolitical tension in Ukraine and the Middle East have not led to major supply disruptions,” OPEC’s Vienna-based secretariat said in its monthly oil market report.