Jun 13, 2012, 11.08 AM IST
The US Energy Information Administration (EIA) on Tuesday cut its 2012 world oil demand growth forecast by 150,000 barrels per day (bpd) to 810,000 bpd, while raising its expectations for output growth from countries outside of the Organization of the Petroleum Exporting Countries (OPEC).
The EIA said it had increased its forecast for non-OPEC crude oil and liquid fuels production growth in 2012 by 120,000 bpd to 800,000 bpd, taking total non-OPEC output to 52.72 million bpd.
Estimates of lower demand growth and higher production growth have added to signs the oil market is well supplied, which has contributed to Brent crude oil falling by more than USD 30 a barrel since the beginning of March.
On Tuesday Brent was trading near USD 97 a barrel, well below March's post-2008 peak of USD 128.40 a barrel. U.S. crude oil futures, which have been pushed lower by higher production in the Midwest of the United States, were around USD 83 a barrel.
"The largest area of non'OPEC growth is North America... resulting from continued production growth from U.S. onshore shale and other tight oil formations and Canadian oil sands," the EIA said, adding that production increases in the United States and Canada would total 890,000 bpd in 2012 and 470,000 bpd in 2013.
Higher output in North America as well as from within OPEC, which is pumping well above its 30 million bpd output target due to production increases by Saudi Arabia, has helped calm market fears about the impact of existing and pending sanctions against Iran's oil industry and exports.
The EIA said it expects Iran's crude oil production to fall by 850,000 barrel per day (bpd) by the end of 2012 because of a lack of investment, reducing its output to 2.7 million bpd from 3.55 million bpd at the end of last year.
The EIA said its forecast did not factor in the potential further impact of more "recent sanctions targeting Iran's central bank and the impending European Union embargo on Iran's crude oil production," which come into effect on July 1.
The EIA said it expects Iran's crude oil production to fall by another 200,000 bpd in 2013.
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