The world faces an oil “supply crunch” after 2010 because demand will outpace the growth in production from non-OPEC countries, according to the International Energy Agency.
Output growth outside of the Organization of Petroleum Exporting Countries, led by Russia and Brazil, will be countered by a decline in Europe, the Paris-based agency said in a report today. That shrinks the cushion of excess capacity that OPEC members such as Saudi Arabia provide, the agency said.
Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with OPEC spare capacity declining to minimal levels by 2012,” the IEA said in its Medium-Term Oil Market Report, which is published every six months. Low OPEC spare capacity and slow non-OPEC production growth are of significant concern.”
Global oil demand is forecast to expand by 1.9 million barrels a day, or 2.2 percent a year on average, reaching 95.8 million barrels a day by 2012, the IEA said. The fastest growth will occur in Asia and the Middle East, it said. Brent crude oil futures prices have averaged $64.11 a barrel so far this year, down from an average $66.11 last year and $55.25 in 2005.
Oil and gas price pressures look set to remain in the coming years,” the IEA said. The agency, an adviser on energy issues to 26 industrialized countries, does not publish a specific price forecast.