According to the recent Organization of the Petroleum Exporting Countries report there has been a rise in the demand estimate for oil in 2011:
The worldwide crude oil demand is estimate to increase from 87.8 million bbl/d to 87.9 million bbl/d, a 1.4 million bbl/d rise in 2011 compared to 2010. The rise in demand is stemmed from the excepted growth rate of 3.9% in the world economy.
Current non-OPEC oil supply is estimated to increase by 0.6 mbbl/d in 2011.
The turmoil in the Middle East, mainly in Libya caused a decline in the total OPEC oil supply during March, while non-OPEC oil supply picked up the slack and increased.
The Libya’s oil production, which was at 1.6 million barrels per day during January, before the war began back in February 2011, fell by over 70% to reach 366 thousands bbl/d during March. Furthermore, during March, OPEC oil supply fell by 0.89 mbl/d to reach 29.2 mbl/d, which is roughly 0.6% of the global oil production; Saudi Arabia picked up most of the drop in Libyan oil production as it rose to 8,961, an increase of 0.64% compared to February 2011, and 3.5% higher than its oil production during January 2011.
On the other hand, the oil production of non-OPEC countries rose by 0.2 mb/d to 53.3 mbl/d.
This report shows that the oil supply has shifted a bit towards non-OPEC oil supplying countries such as Canada, US, Brazil and Australia that are further away from Europe and China, two of the largest consumers of crude oil. This shift in oil supply location might be one of the reasons for the rise in oil prices in recent months along with the decline in supply of sweet crude oil – a type of oil that Libya is known to produce.
For further reading (in this site):
- Oil prices remained unchanged – Weekly recap 11-15 April
- Weekly outlook for April 25-29
- Crude oil prices outlook 27 April