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US to cut non-OPEC supply forecasts

Non-OPEC oil supply growth in 2008 will be “very disappointing” after an unexpected drop in Russian oil production and a steeper fall in Mexican output, the US government’s top energy forecaster said on Monday.

Speaking at the Reuters Global Energy Summit, Guy Caruso, head of the Energy Information Administration (EIA), said his agency would cut its non-OPEC supply forecast again next week. “Once again our projections for 2008 additions to supply from non-OPEC countries have been revised downward,” said Cauruso. “The decline in Mexico is steeper and longer than we had thought (and we have) a decline in Russia, which we weren’t anticipating.”

Mexico’s state oil company, Pemex, said last week that Mexican oil production would fall short of the 3 million barrels per day (bpd) target it set for 2008 as output from the giant Cantarell field fell faster than anticipated. Russian oil production has fallen each of the first five months of 2008, prompting the government to offer tax breaks to oil companies to encourage new drilling.

The EIA estimated in its May short-term oil outlook that non-OPEC oil production would rise by 600,000 barrels per day (bpd) in 2008. “It will be more than a cosmetic cut, but we’re still working on the number,” Caruso said. The EIA began 2008 estimating that non-OPEC oil production would rise by 900,000 barrels per day (bpd), but cut its output forecast in March and April. (Reuters)