The global oil market remained relatively tight in September and October as spare OPEC production capacity stood at 2 million b/d, the US Energy Information Administration said Friday in its fifth congressionally mandated report on non-Iranian oil supplies.
EIA cut its earlier surplus capacity estimates for July and August by 25% to 1.8 million b/d from 2.4 million b/d. The agency dropped the figure because of upward revisions to oil production in Saudi Arabia and the United Arab Emirates.
"These estimates do not include additional capacity that may be available in Iran, but which is currently offline due to the impacts of US and European Union sanctions on Iran's ability to sell its oil," the report said.
EIA defines spare capacity as oil production that could be brought online in 30 days and sustained for at least 90 days.
Global oil consumption dropped by 900,000 b/d in October, EIA said, given the end of the US summer driving season, lower demand for oil-fired electricity generation in the Middle East and a change of seasonal factors in Europe.
Total consumption stood at 89.1 million b/d in October, down from 90 million b/d in September. The two-month average for September and October, 89.6 million b/d, was 800,000 b/d higher than the same period in 2011, EIA said.
OPEC output averaged 36.6 million b/d in September and October, up from 35.2 million b/d in the same period in 2011.
Non-OPEC crude supply averaged 52.4 million b/d in September and October, up from 52 million b/d in 2011. North America drove that increase, with 17.9 million b/d in September and October, compared with 16.9 million b/d in the same period in 2011.
"While total unplanned production outages in some non-OPEC countries remain higher than normal, they declined in October after production capacity was restored in the US Gulf of Mexico following disruptions related to the late August landfall of Hurricane Isaac," the report said.
EIA must prepare the reports as part of the latest US sanctions against Iran. The law says President Barack Obama must determine and report to Congress every 60 days whether a sufficient supply of crude and petroleum products exist outside of Iran to permit the US to keep the lid on Iranian exports without hurting allies' economies or causing price spikes.
