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Page added on February 22, 2010

Non OPEC global crude oil output to peak by 2011?

Francisco Blanch from Bank of America Merrill Lynch has predicted that the non OPEC global crude oil output will peak by 2011. “We conclude that non OPEC supply, including non-conventional oil, NGLs and biofuels, will likely peak by 2011 at around 52.3 million barrels a day. Thereafter we see steady declines in production, reaching 51 million barrels a day by 2015. The world will thus become more reliant on OPEC and we see utilisation rates reaching 95 per cent by 2014,” he said.

The contraction in OPEC output in 2008-09 is similar to cuts implemented in the “normal” recession of 2001-02, said Blanch. “With EMs demanding increasing volumes of oil and total non OPEC supply likely to peak within two years, we think the required adjustment to the medium-term demand and supply balances will have to come through lower OECD consumption and more OPEC barrels,” he said.

The global demand for crude oil will rise two million barrels a day this year with emerging economies accounting for three quarters of this rise, Blanch had told Emirates Business earlier. “While the demand in emerging economies will rise by 1.5 million barrels a day, it will rise by 0.5 million barrels a day in the OECD economies.” according to Francisco Blanch, Global Head of commodities research at Bank of America Merrill Lynch.

Oil prices will average at $85 a barrel this year, Blanch said. “It will potentially get close to $90 a barrel by the third quarter of 2010 and oil prices will be trading into the $100 mark in the first quarter of 2011″ the analyst credited for forecasting $147 a barrel price for oil almost on the nose in 2008 had told this newspaper earlier.