World oil markets will tighten in the fourth quarter as OPEC cuts supply and peak winter demand kicks in, the International Energy Agency said this morning.
The world's thirst for oil will rise 2.4 million barrels per day (bpd) in the last three months of this year from the third quarter, the Paris-based agency said in its Oil Market Report. That is 400,000 bpd higher than the agency forecast last month.
And with demand expected to rise, OPEC is pumping less.
October output from the Organization of the Petroleum Exporting Countries was 29.4 million bpd, down 335,000 bpd from September, the IEA said.
That leaves OPEC pumping 400,000 bpd below the requirement for its crude during the fourth quarter, the IEA said, meaning refiners will have to drain oil from inventories.
Lower production from OPEC, which supplies more than a third of the world's oil, lifted the group's spare capacity to 2.15 million bpd in October, up 210,000 bpd on the previous month.
Demand for OPEC oil will drop 500,000 bpd in 2007 to 28.3 million bpd, as supplies increase from rival producers, the energy adviser to 26 industrialised nations said.
This year, however, non-OPEC producers have failed to live up to expectations. The IEA cut its 2006 non-OPEC supply growth forecast by 90,000 bpd to 900,000 bpd.
Tighter fundamentals in the fourth quarter will help reverse the biggest third quarter stock build for 15 years, the agency said. Oil inventories in the OECD rose by 1.15 million bpd during the third quarter, it said.
The agency's forecast for global oil demand growth next year was steady at 1.45 million bpd, but it cut the outlook for this year by 130,000 bpd to 900,000 bpd.