IEA sees balanced oil market as OPEC boosts output

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FE Team | Published: December 14, 2011 00:00:00 | Updated: February 01, 2018 00:00:00

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LONDON, Dec 13 (Reuters): Healthy production levels by OPEC will help balance oil markets next year as demand growth slows, the West's energy watchdog said Tuesday, a day ahead of a policy-setting meeting by the producer group. The International Energy Agency said in its monthly oil market report that OPEC raised its output to highest in more than three years. "Our base case is seeing a relatively balanced market next year if OPEC continues to produce at the levels they have been producing at over the last three or four months," said David Fyfe, head of the oil industry and markets division of the IEA. The IEA and OPEC clashed in June when the IEA had predicted a steep rise in demand and called on OPEC to help replace lost Libyan output in order to avoid oil prices spiking further and damaging the economic recovery. OPEC, which produces a third of global oil, rejected pressure and failed to agree higher output targets, which resulted in the IEA releasing stocks and further angering OPEC. The group's leader, Saudi Arabia, has unilaterally raised production and was pumping at the highest in the past 30 years in November while the IEA has meanwhile repeatedly cut estimates for the global demand in 2012 amid Europe's debt crisis. "We think that the market for 2011 and 2012 now looks tight to balanced and there is the prospect of it easing somewhat after that," Fyfe said. The IEA said its average call on OPEC crude for the first half of 2012 should stand at 29.35 million bpd versus 30.68 million bpd produced in November.