Total oil supply, excluding OPEC, will stand at almost double the oil group's supply in 2009, according to a new report.
Releasing the data to coincide with yesterday's formal 152nd meeting of its members, OPEC said the non-Opec producers, including Russia, the US, Vietnam, Brazil, Australia, New Zealand and India, will meet much of the supplies shaved off by OPEC cuts
In what may serve as another blow to oil prices, OPEC said around 40 very large crude carriers (VLCCs) full of oil are currently floating in the seas. Analysts say this will ensure that a million-barrel-a-day cut may take two months to make an impact on prices.
The data presented by the organisation showed that the total crude supplies into the global oil markets, other than the OPEC crude to which the cut is applicable, will stand at 55.54 million barrels per day. Demand for OPEC crude is to average at 29.1 million barrels a day, the report said.
While OPEC more than 40 per cent of the global oil demand, it would meet 34 per cent this year, data showed.
Robin Mills, a Dubai-based oil economist, said Russia has become a key contributor to the still-strong non-Opec supply. "They have always shown their willingness to co-operate with OPEC but have later opted only for token cuts," he said. Russia is the world's largest producer of oil. OPEC estimated Russian oil production in 2009 will average at 9.65 mbpd.
The cartel expressed apprehension the country will increase oil supply this year. "The uncertainty over Russian oil supply remains high as various reports suggest a possibility of a tax cut which may partially support operators' spending and ultimately improve production," OPEC said.
OPEC said the US supply will grow by 200,000 barrels a day this year. Besides the US, countries like Canada and Mexico may increase production, OPEC said. Supply from Canada is expected to increase by 70,000 barrels a day this year.
Brazil will be another major contributor to non-OPEC supply this year. "Brazil's supply is to increase 160,000bpd in 2009," the report said. Oil supply from Latin America is projected to average 4.28mbpd in 2009, an increase of 0.2mbpd from a year earlier.
The estimates still put the number of VLCCs being tied up in storage in February at about 35 to 40 vessels, making up seven to eight per cent of the global VLCC fleet. Mills said this would ensure that any announcement by OPEC to further shave crude supply will take at least two months to make an impact.
"Each VLCC has a storage capacity of two million barrels of crude. Forty tankers would mean 80 million barrels. That's almost a day's consumption of oil. A million barrel a day cut should therefore take 80 days to have an impact on prices," he said.