Scant non-OPEC oil supply seen
WASHINGTON (Reuters) - Oil supplies from non-OPEC countries will be far smaller this year than previously expected and unable to keep up with growing global oil demand, putting upward pressure on petroleum prices, the U.S. government's top energy forecasting agency said on Tuesday.
Non-OPEC oil supplies are projected to rise by only 230,000 barrels per day this year and by 830,000 bpd in 2009, the federal Energy Information Administration said in its new monthly forecast.
That is way down from the agency's estimate at the beginning of this year that non-OPEC supply would grow by 860,000 barrels per day in 2008 and by over 1.5 million bpd next year.
"Faster declines in older fields and delays in expansion projects have limited supply growth," the EIA said.
Much lower oil production in Russia, the North Sea and Brazil is mostly to blame for lower non-OPEC supply levels, the agency said.
The EIA has cut its estimate for the growth in non-OPEC oil supplies in just about every one of its monthly forecasts this year, said EIA analyst Matthew Cline.
"Everyone has overestimated non-OPEC supply," said Cline. He said the project delays, which account for most of the lower output, are due to higher energy development costs and the difficulty in finding experienced workers.
The EIA warned that it cannot rule out more delays in key projects in non-OPEC countries and faster production declines in some older fields.
"As a result, net non-OPEC production gains could be less than the current forecast, leading to both higher demand for OPEC oil and higher prices than currently projected," the EIA said.
The agency revised up its estimate for U.S. oil prices to an average $127 a barrel this year and $133 in 2009, a huge jump from the average oil price of $72 last year.
Higher oil costs will be passed on to consumers, cutting into family budgets already strained from rising food costs.
The agency is forecasting that the average monthly U.S. retail price for gasoline will peak at $4.25 a gallon this November and not fall below $4 until October 2009.
The higher fuel costs are causing U.S. consumers to reduce their driving, which along with a weak economy, is slashing petroleum consumption. The EIA revised down its forecast for U.S. oil demand this year by 120,000 bpd and by 100,000 bpd for 2009.
Total U.S. oil use is expected to fall by 410,000 bpd in 2008 compared with last year, and then rise by only 40,000 bpd in 2009.
(Reporting by Tom Doggett; Editing by Marguerita Choy)
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