Oil prices are likely to rise despite forecasts of higher non-OPEC crude oil production in the final four months of 1994, the London-based Centre for Global Energy Studies says in its monthly review of oil markets.
‘Demand growth has been more robust than expected and the forward cover provided by industry stocks has been steadily eroded,’ the centre says. ‘Cuts in North Sea production due to maintenance and upward revisions to non-OECD demand forecasts have added an extra 200,000 barrels a day to the call on OPEC crude in the third and fourth quarters.’ The centre says that stocks are much lower than they were at this time last year.
The centre says that the gap between the call on OPEC oil and its supply will sustain the upward momentum of prices over the rest of 1994. The forecast rise in non-OPEC output in the fourth quarter will not be enough to rebuild industry stocks to 1993 levels, it adds.
The centre forecasts that the average price of the OPEC basket of crude oils will rise above $17 a barrel in the third quarter. It forecasts that the call on OPEC crude oil will be 26.2 million barrels a day (b/d) in the final three months of the year compared with 25.8 million b/d in the same period of 1993.
The OPEC secretariat in Vienna has revised its estimate of the likely call on OPEC crude oil supply to 26.12 million b/d – 70,000 b/d lower than its previous projection.