Compounding the problem, the price of OPEC’s reference basket of crudes has fallen from a six-month average of around $105 a barrel to around $101 in June.
Supply growth in 2013 continues to be forecast at around 800,000 barrels a day, rising to 1 million barrels a day in 2014. That rise in demand is expected to be met by non-OPEC sources like the U.S., Russia, and China. In its Short-Term Energy Outlook published yesterday, the U.S. Energy Information Administration (EIA) estimated that U.S. crude production would rise from an average of 7.3 million barrels a day this year to 8.1 million barrels a day next year.
Lower prices and falling demand pose a significant problem for OPEC members, all of which depend on crude sales for a majority of their national incomes.
The International Energy Administration is scheduled to issue its monthly oil market review tomorrow.
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