London - Soaring US oil production should be enough to allow consumers withstand most potential supply shocks, the International Energy Agency (IEA) said on Wednesday, as it cut estimates for global oil demand.
“The oil-producing world today is in the midst of a onceinageneration transition of farreaching consequences,” the IEA, which coordinates the energy policies of major consuming nations, said in its monthly oil market report.
“Rarely has the market's ability to withstand crisis been so tested as in the two years since the start of the socalled Arab Spring. Yet the market seems to have taken it all - civil uprisings, terrorist attacks, natural disasters, production outages, trade embargoes - in its stride,” it added.
The IEA expects nonOPEC supply to grow by 1.1 million barrels per day (bpd) in 2013 to 54.5 million bpd, led by North American booming shale oil output.
The agency said a year-on-year gain of 1.1 million bpd in US oil supply in the fourth quarter of 2012 was a record, not only for that country but also for any nonOPEC producer since at least 1994.
The IEA reduced its estimate for demand for OPEC's crude oil in 2013 by 100,000 barrels per day to 29.7 million bpd, the lowest since 2009, reflecting rising competition and a weak global economy.
The estimates are in line with monthly reports by the US government and by OPEC itself published on Tuesday.
OPEC expects US oil supply to rise by 580,000 bpd to 10.59 million bpd in 2013, which it said would be the highest level since 1985. OPEC also said demand for its own crude would fall to 29.7 million bpd this year.
“SUBDUED GROWTH RATE”
The US government sees global oil demand rising 1.01 million bpd in 2013 and non-OPEC production growth reaching 1.17 million bpd.
The IEA said it remained bearish on oil demand for 2013 and trimmed its outlook for the 2013 oil demand growth by 20,000 bpd to 820,000 bpd.
“The subdued growth rate of oil demand now looks increasingly entrenched in the face of high oil prices and weak economic growth,” it said.
It said that the US budget “sequester”, worsening Chinese business sentiment and continued deterioration in European employment were three economic “hits” appearing to further delay an turnaround in global economic growth.
The IEA also expects Iranian oil exports to hold strong and even exceed 1.4 million bpd in March.
“New US sanctions implemented in February, which bar Iran from repatriating earnings from its oil exports, appear not to have had an impact on February shipments,” the IEA said in its monthly report.
The sanctions are part of a stand-off between the West and Iran over Tehran's nuclear programme and are aimed at curbing Iran's revenues.
Iranian exports fell below 1 million bpd during several months in 2012 from around 2.5 million bpd in 2011. They have rebounded above 1 million bpd in 2013.
Industry sources told Reuters on Tuesday that Iran's exports in March may plunge by a quarter from a month earlier to the lowest since Western sanctions came into effect in 2012. - Reuters