Saudi Arabia will account for 23.12 percent of Middle Eastern regional oil demand by 2014, while providing a dominant 39.37 percent of supply, the latest “Saudi Arabia Oil & Gas Report” from BMI released on Tuesday forecast. Regional oil use of 7.47 million barrels per day (b/d) in 2001 rose to an estimated 10.64 million b/d in 2009. It should average 10.98 million b/d in 2010 and then rise to around 11.95 million b/d by 2014. Regional oil production was 22.83 million b/d in 2001, and averaged an estimated 24.66 million b/d in 2009. It is set to rise to 27.18 million b/d by 2014. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 15.36 million b/d. This total had eased to an estimated 14.02 million b/d in 2009 and is forecast to reach 15.23 million b/d by 2014. Iraq has the region's greatest production growth potential, followed by Qatar. In terms of natural gas, the Middle East consumed an estimated 367.6bn cubic metres (bcm) in 2009, with demand of 492.5bcm targeted for 2014, representing 28.7 percent growth. Estimated production of 429.9bcm in 2009 should reach 657.8bcm in 2014 (+39.8 percent), which implies net exports rising to 165.0bcm by the end of the period. Saudi Arabia consumed an estimated 22.09 percent of the region's gas in 2009, with its market share forecast to reach 21.72 percent by 2014, the report said. It contributed an estimated 21.59 percent to 2009 regional gas production and, will account for 23.27 percent of supply by 2014. BMI asserted its forecast that the OPEC basket of crudes will average $83.00/bbl in 2010. “Wide variations in crude differentials so far in 2010 make forecasting tricky for Brent, West Texas Intermediate (WTI) and Urals, but we believe the three benchmarks will average around $85.11, $88.22 and $83.62/bbl respectively, with Dubai coming in at $83.14,” the report said. By 2011, there should be further growth in oil consumption and more room for OPEC to regain market share and reduce surplus capacity through higher production quotas. The report saw a further increase in the OPEC basket price to an average $85.00/bbl. “For 2012 and beyond, we continue to use a central case forecast of $90.00/bbl for the OPEC basket.” BMI's assumption for premium unleaded gasoline in 2010 is an average global price of $96.83/bbl. The year-on-year (y-o-y) rise in 2010 gasoline prices is put at 38 percent. Gasoil is expected to average $92.45/bbl in 2010, with the full-year outturn representing a 37 percent increase from the 2009 level. The annual level for jet fuel in 2010 is forecast to be $95.58/bbl, compared with $70.66/bbl in 2009. BMI put the average naphtha price at $82.46/bbl in 2010, up 39 percent from the previous year's level. “We assume that Saudi Arabian real GDP grew by 0.2 percent in 2009 and forecast 2.0 percent growth in 2010,” the report further said. Average annual GDP growth from 2010-2014 is put at 2.7 percent. “We expect oil demand to rise from an estimated 2.34 million b/d in 2009 to 2.76 million b/d in 2014, representing around 3.0 percent annual growth beyond 2009 and broadly matching our underlying economic assumptions.” Gas production should reach 107bcm by 2014, up from an estimated 81bcm in 2009. Between 2010 and 2019, MBI forecast an increase in Saudi Arabian oil production of 21.9 percent, with volumes rising steadily to 12.10 million b/d by the end of the 10-year forecast period. Oil consumption is set to increase by 28.6 percent, with growth slowing to an assumed 3.0 percent a year towards the end of the period and the country using 3.20 million b/d by 2019. Gas production is expected to rise from an estimated 81bcm to 117bcm by the end of the period. Demand growth of 43.8 percent from 2010-2019 will provide a balanced market throughout the period. World oil prices fell for the seventh straight session Tuesday amid market concerns that the US economic recovery could stall. New York's main contract, light sweet crude for August delivery, reversed early gains to end 16 cents lower at $71.98. London's Brent North Sea crude for August dipped two cents to $71.45.
