OPEC Crude Supply To Outpace Demand In 2nd Half Of 2013: IEA [Correction]

A previous version of the story incorrectly spelled "Half" in the headline.

The International Energy Agency (IEA) said in a report released Wednesday that it expects the Organization of Petroleum Exporting Countries' (OPEC) crude oil production to outpace demand in the second half of the year as European demand remains weak and Chinese demand grows at a slower pace than it has in recent years.

The IEA said OPEC members, which are responsible for 40 percent of the world's crude oil, will need to produce an average 29.8 million barrels a day in the second half of 2013 -- 1.1 million fewer barrels than the 30.9 million barrels per day they pumped in May in order to remain on pace with global demand.

The monthly assessment from the industry's leading monitor indicates that OPEC's crude oil supply rose in May by 135,000 barrels per day to a total of 30.9 million barrels per day, the highest level it's been in seven months.

"While Europe's economic woes are taking a toll on demand, there are mounting signs that China's oil use, like its economy, may have shifted to a lower gear," the Paris-based IEA said in its report.

The IEA lowered its forecasts for the amount of crude oil the world will demand from OPEC in the second half of 2013 by 200,000 barrels per day, to 29.8 million per day, as Saudi Arabia, Iran, the UAE and Kuwait increase their output levels but as Iraq, Libya and Nigeria reduced their output.

The forecast of global oil demand growth is little changed, and the IEA forecasts that China will account for about half of the world's growth. However, it also forecasts that Chinese demand will rise this year by only 365,000 barrels a day to 9.96 million, which is 15,000 less than had been anticipated in the group's previous report.