IEA Cuts Demand Forecast, Non-OPEC Supply Growth on Recession

Posted on March 13, 2009. Filed under: Advanced Biofuel, Field-to-Pump | Tags: , , , , |

IEA Cuts Demand Forecast, Non-OPEC Supply Growth on Recession

by Alexander Kwiatkowski

 

 

March 13, 2009 (Bloomberg) — The International Energy Agency cut its 2009 oil demand forecast for a seventh month as the global slump saps consumption. Non-OPEC supply growth has stopped as investment drops and faults close fields, it said.

 

The Paris-based adviser to 28 nations reduced its 2009 oil demand forecast by 270,000 barrels a day to 84.4 million barrels a day. That represents a decline in demand of 1.25 million barrels a day, or 1.5 percent, from 2008.

 

“The demand collapse has been staggering, based on the whirlwind nature of the slump in the global economy,” the IEA said in its monthly oil report today. “The obvious flip-side to this is that lower prices also lead to a supply response.”

 

The Organization of Petroleum Exporting Countries will meet in Vienna on March 15 to review production quotas as the economic crisis keeps oil below $50 a barrel. Efforts to increase prices by cutting output further pose a risk to economic recovery, the IEA’s executive director Nobuo Tanaka said last month.

 

While the worldwide recession crimps demand, a lack of available credit to fund investment in new projects and ongoing production problems in Azerbaijan are reducing supply from outside OPEC, the IEA said.

 

The IEA trimmed its forecast for supplies from outside the producer group next year by 360,000 barrels a day to 50.6 million barrels a day. Non-OPEC supply is now projected to be unchanged from last year.

 

North America

The revision is the agency’s seventh consecutive reduction of its 2009 crude demand estimate and is driven by declines in North America, Asia and the former Soviet Union, it said.

 

The IEA cut demand expectations in the North America by 160,000 barrels a day to 23.51 million barrels a day, implying a contraction of 780,000 barrels a day, or 3.2 percent. The estimate for oil consumption this year among developing nations was lowered by 190,000 barrels a day to 38.5 million a day.

 

OPEC, which supplies about 40 percent of the world’s oil, is still in the process of implementing reductions agreed last year totaling 4.2 million barrels a day. Algeria said this week the group should agree to new curbs in Vienna, while members such as Qatar and Nigeria said there is no need for further action.

 

The group’s 12 members pumped 28 million barrels a day of crude in February, 1.1 million barrels a day less than in January, the IEA said. Saudi Arabia, OPEC’s biggest producer, cut by 150,000 barrels a day last month to 7.95 million barrels a day, according to the agency.

The 11 OPEC nations bound by production quotas pumped 25.7 million barrels a day last month, the IEA said, compared with their official Jan. 1 limit of 24.845 million a day. That implies the group is complying with 80 percent of its production targets, the IEA said.

 

For Related News and Information:

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

 

 

About Renergie

Renergie was formed by Ms. Meaghan M. Donovan on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita.  Each ethanol plant will have a production capacity of five million gallons per year (5 MGY) of fuel-grade ethanol.  Renergie’s “field-to-pump” strategy is to produce non-corn ethanol locally and directly market non-corn ethanol locally. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida Department of Environmental Protection’s Renewable Energy Technologies Grants Program.  Renergie received $1,500,483 (partial funding) in grant money to design and build Florida’s first ethanol plant capable of producing fuel-grade ethanol solely from sweet sorghum juice. On  April 2, 2008, Enterprise Florida, Inc., the state’s economic development organization, selected Renergie as one of Florida’s most innovative technology companies in the alternative energy sector.  On January 20, 2009, Florida Energy & Climate Commission amended RET Grant Agreement S0386 to increase Renergie’s funding from $1,500,483 to $2,500,000. By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is renewable, more economical, cleaner, and more efficient than unleaded gasoline.  Moreover, the Renergie project will mark the first time that Louisiana farmers will share in the profits realized from the sale of value-added products made from their crops.

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    Renergie created “field-to-pump," a unique strategy to locally produce and market advanced biofuel (“non-corn fuel ethanol”) via a network of small advanced biofuel manufacturing facilities. The purpose of “field-to-pump” is to maximize rural development and job creation while minimizing feedstock supply risk and the burden on local water supplies.

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