EIA sees OPEC oil output, surplus capacity to rise soon

The US slightly tweaked its forecast higher Tuesday for OPEC crude oil output and surplus production capacity in 2009. Crude oil production from OPEC countries will average 29.02 million barrels a day this year, a marginal increase over the previous estimate of 29.01 million barrels a day, the US Department of Energy estimates in its latest monthly outlook.

OPEC produced 28.7 million barrels a day during the first half of 2009. The EIA also raised its 2010 outlook for OPEC production by 300,000 barrels a day to 29.19 million barrels a day. The August output estimate was revised down by 100,000 barrels a day to 29.35 million barrels a day.

According to Energy Information Administration forecasts, OPEC production on a monthly basis peaked in August for the year and is expected to gradually fall as the winter progresses, bottoming out in March.

“EIA expects OPEC production to rise gradually over the second half of the year in response to an anticipated rebound in demand, unless prices fall sharply from current levels,” the Energy Department’s Energy Information Agency said in its Short-Term Energy Outlook.

Last month, OPEC member states said they would maintain production levels in anticipation of a rebound in demand despite high inventories around the world. Members of the producers’ group, which accounts for 40% of the world’s oil supply, had cut production by 4.2 million barrels a day last year.

However, compliance by OPEC members has dropped to roughly 65% recently from more than 83% in March as oil prices rebounded. Crude oil futures have more than doubled since their February lows, but have recently been mostly trading in a $65 to $70 a barrel range in recent months on the NYMEX.

The EIA didn’t revise its crude price projections upward due to “ample oil supplies” due to a high level of inventories and expectations OPEC will increase production. Output from Saudi Arabia, the world’s No. 1 oil exporter, fell by 100,000 to 8.3 million barrels a day in September, according to the EIA.

Meanwhile, the EIA’s estimate for surplus production capacity edged up slightly for 2009 by 20,000 barrels a day to 3.85 million barrels a day, but decreased by 120,000 barrels a day in 2010 to 4.32 million barrels a day.

Tags:  EIA, oil output, OPEC