On Wednesday, the International Energy Agency, the western nations’ oil watchdog, lowered its forecast of non-Opec supply growth to 270,000 b/d to the end of this year, less than a third of the 1m b/d it predicted at the start of the year.
It's connected with the expected demand cut because of the impact of high prices and weaker economic environments, particularly in the US and Europe.
Last year non-Opec production grew by 425,000 b/d and the IEA said it expected a rebound in growth in 2009 to about 760,000 b/d. But it warned the risk for its 2009 forecast was skewed to the downside.
Biofuels – mostly corn-based ethanol in the US and sugar cane-based ethanol in Brazil – represent only a fraction of global oil production but have been the largest source of non-Opec output growth in the past two years. The IEA forecast that biofuel output would grow next year by 340,000 b/d.
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Alternative oil sources decrease
The oil market is facing both reduced supplies from Opec and lower non-Opec supplies
