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OPEC getting squeezed by North America

July 17, 2013 at 7:03 AM   |   Comments

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HOUSTON, July 17 (UPI) -- Members of the Organization of Petroleum Exporting Countries are mulling production levels in light of North American oil gains, an analyst said.

OPEC in its monthly market report for July said it expected demand for crude oil from its members for 2014 would be at 29.6 million barrels per day, 2.6 percent less than existing production levels.

The cartel said it expected oil production from non-member states to increase by 1.1 million bpd next year, with the bulk of that coming from the United States and Canada.

Marcela Donadio, an oil and natural gas researcher at Ernst & Young, told energy reporting website Rigzone the 12-member oil cartel was concerned by North American oil production.

"While these [projected] volumes do not move into international markets, they displace oil that would have otherwise come here -- thus the net available market for OPEC oil is a bit more competitive," she said in an interview published Tuesday.

Five of the 12 members of OPEC reported oil production declines from May to June.

OPEC cut production levels in 2008 in response to the global financial crisis. It said in its July report it expected global oil demand to increase by 1 million barrels per day next year because of general improvements in the health of the global economy.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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