The Organization of Petroleum Exporting Countries, OPEC, is forecasted to reduce production by 800.000 barrels per day towards the end of 2006, according to the latest estimate from the United States Energy Department, DoE.
Last October OPEC agreed to cut daily production by 1.2 million barrels as of November first to help contain the drop in prices.
"But OPEC did not specify the production levels of the cartel's country members on which the reductions are to be calculated", underlined the Energy Department.
This contributes to further inject uncertainty to an already volatile market, but DoE estimates that "OPEC production will drop by 800.000 bpd, based on October's output, from here to the end of the year".
Because of this reduction and a growing winter demand for oil in the northern hemisphere the average price for a barrel of crude should increase 2 US dollars monthly in the coming months. Therefore the barrel of crude should end 2006 in the range of 66 US dollars and in 2007, 65 US dollars.
"In spite of the higher prices, global oil consumption is forecasted to increase a million barrels per day in 2006, and 1.5 million bpd in 2007", a drop of 200.000 bpd in 2006, compared to the previous DoE estimate.
Oil production in the US this year is estimated to stabilize in 5.2 million bpd, almost the same as in 2005. But in 2007 production should increase to 5.4 million bpd mainly because of pumping resumption in the Gulf of Mexico which during the first semester of this year was under repairs following the 2005 hurricane damages and the discovery of new deposits in deep water.
Meantime in London the International Energy Agency, IEA, forecasted that global energy demand will balloon 53% by 2030 pushed by China and India's demand. This means that gas emissions, if nothing is done, will also increase by 52% in the next 25 years with further impact on climate change.
The surge in demand will be concentrated 70% in developing countries and oil and gas imports will surpass supply reaching 116 million bpd by 2030 compared to the current 84 million bpd.
IEA also points out that "strong political action" plus investments and alternatives energies will be needed to ensure the world moves on a "sustainable energy track".
"With the current consumption tendencies we face an insecure, contaminated and expensive energy future", says IEA which points out that a change in the "energy demand concept" could reduce it by 34%.
But growing energy demand in countries such as China and India can't be condemned since they are following the trail of Western industrialized countries economic growth", highlighted Claude Mancil, IEA CEO.
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