EIA downplays OPEC supply cuts
By Tom Stundza -- Purchasing, 10/11/2006 12:08:00 PM
Crude oil production by the Organization of Petroleum Exporting Countries likely will hold at current levels just below 30 million barrels/day in 2007, despite an output cut being mulled by the cartel to defend prices, the U.S. Energy Information Administration forecast Tuesday. News reports say OPEC ministers are moving toward a deal to cut 1 million barrels per day of crude oil from oversupplied markets, its first supply cut in two years. However, the Energy Information Administration, the statistical arm of the U.S. Energy Department, “projects that actual production cuts by OPEC as a group will be less than stated because OPEC quota cuts are prorated among its members based on previous quota levels.” That's because several OPEC members are already producing below their official output quotas, the EIA says in its monthly oil market report. OPEC's current official production ceiling is 28 million barrels/day. The Organization of the Petroleum Exporting Countries, which pumps more than a third of the world's oil, is working out details of the cut from the current 27.5 million barrels/day output, but has yet to formally announce an agreement. According to the EIA, OPEC in September produced about 29.64 million barrels/day, and “average OPEC crude oil production for 2007 is expected to be at current levels.”
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