Here is the best output of the U.S. government oil statistics bureau, for what it’s worth:

Oil market to ease on higher supplies, EIA says

By Moming Zhou, MarketWatch

Last update: 3:20 p.m. EST Feb. 12, 2008

SAN FRANCISCO (MarketWatch) — The world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand, the U.S. Energy Information Administration said Tuesday.

Oil prices, however, will remain higher than last year’s. The barrel, which averaged $72 in 2007, is expected to average about $86 in 2008 and $82 in 2009. Oil topped $100 a barrel early this year.

Higher crude prices will push gasoline prices to as high as $3.40 per gallon this spring, the EIA said in its monthly report, and this year’s average gas prices will exceed $3 a gallon.

The ease of the oil market mainly comes from higher supplies, according to EIA. Surplus production capacity is projected to grow from the current level of less than 2 million barrels a day to more than 4 million barrels a day by the end of 2009.

At the same time, EIA tuned down its prediction of demand increases. World oil consumption is expected to grow by 1.4 million barrels a day in 2008, about 200,000 barrels lower than last month’s assessment, "due to increased risks of a global economic slowdown in 2008," the agency wrote in the report released Tuesday.

"This [supply-demand] balance suggests some price softening, although delays or downward revisions in capacity additions" in both Organization of Petroleum Exporting Countries and non-OPEC nations "could alter the outlook," EIA said.

OPEC

Members of OPEC, the cartel that controls nearly 40% of the world’s oil production, held their quotas unchanged at a Feb. 1 meeting, defying repeated calls from major oil-consuming countries to raise production.

Rather than an increase, OPEC may consider to cut its output at the next meeting on March 5. Dow Jones Newswires reported last week that two senior delegates said the cartel should lower its production.

"Lower demand coupled by economic hurdles in the U.S. warrants a cut," an unnamed senior delegate told the newswires. "Even if we were not facing economic concerns in the U.S., it is normal for OPEC to usually cut production for the lower demand season."

The EIA monthly report, however, predicted OPEC is increasing its production. Output from the cartel will average about 32.2 million barrels a day during the first quarter of 2008 — about 600,000 barrels a day above fourth quarter’s level.

EIA said that the increase mainly reflects higher production from Angola, Kuwait, Saudi Arabia and United Arab Emirates. OPEC members have a tradition of not following their quotas, analysts said.

But OPEC would likely consider lowering output to avoid "a sharp price decline" in oil prices if consumption rises more slowly than expected and if crude inventories climb, the agency wrote.

On the New York Mercantile Exchange, crude futures for March delivery fell for the first day in four, down to an intraday low of $91.76 a barrel, as analysts expected U.S. crude inventories have risen for a fifth week in the week ending Feb. 8. See Futures Movers.

Moming Zhou is a MarketWatch reporter, based in San Francisco

Tags: energy investments

This entry was posted on Thursday, February 14th, 2008 at 10:05 pm and is filed under Price of oil, oil supply. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.