The world can cope for now with the loss of about 1 million barrels per day (bpd) of oil from Alaska and Nigeria, but the pressure is on exporter group OPEC to fill the gap, the International Energy Agency said on Friday.

It bumped up the estimate of demand for oil from the Organization of the Petroleum Exporting Countries by 600,000 bpd in the third quarter and 200,000 bpd in the fourth in its monthly Oil Market Report.

But OPEC, which pumps a third of the world's oil, is already meeting the extra requirement, the Paris-based agency said. It pegged July OPEC output at 29.8 million bpd, well above the revised third quarter call of 29.1 million.

In the overall balance, there has been no deterioration in oil market fundamentals, said Lawrence Eagles, head of the Oil Industry and Markets division at the IEA. There's quite a lot of crude around, so there's not much of a worry.

Oil prices hit record highs above $78 this week after BP Plc (BP.L: Quote, Profile, Research) said it was shutting down production at its 400,000 bpd Prudhoe Bay oilfield in Alaska because of pipeline corrosion.

The prospect of losing up to 8 percent of U.S. output came on top of supply disruptions in Nigeria, Iraq and worries over the reliability of Iran's exports. The IEA, energy adviser to 26 industrialized nations, pegged Nigerian outages at 750,000 bpd.

Any further supply increase from OPEC would squeeze its spare production capacity, which the IEA reckons is around 2 million bpd.

In the light of the many possible threats to output, including the current hurricane season, there is little doubt that the upstream spare capacity cushion remains thin, it said.

While Prudhoe Bay represents a significant outage, there are potential offsets, from Saudi Arabia, the U.S. Strategic Petroleum Reserve and above trend refiner stocks.

OPEC CUSHION THINS

A prolonged outage at Prudhoe Bay, the biggest oilfield in the United States, would increase the strain on OPEC -- especially lead producer Saudi Arabia which holds most of the group's spare capacity.

The IEA said Riyadh pumped 9.2 million bpd last month and the kingdom could swiftly restore some 400,000 bpd it cut during the second quarter when refiner demand fell due to seasonal maintenance.

We're assuming the 400,000 barrels per day is readily available, said Eagles. And spare Saudi oil capacity is similar in quality to lost medium, high-sulfur Alaskan barrels.

But Eagles warned the actual requirement for OPEC oil could be as much as 600,000 bpd higher than the revised estimate. That is the margin of error in the IEA's supply and demand balances.

The loss of output from BP's Alaskan oilfield also forced the IEA to cut its 2006 forecast for non-OPEC supply growth by 280,000 bpd to 860,000 bpd. It raised 2007 growth from the independent producers by 190,000 bpd to 1.89 million bpd.

Aside from the Alaskan outage, non-OPEC is failing to live up to 2006 expectations due to the late start-up of new projects and heavy maintenance in the North Sea.

Demand for this year is expected to grow by 1.2 million bpd to 84.8 million bpd, while expansion in 2007 is set to quicken to 1.6 million bpd, said the IEA.

But the IEA's chief economist, Fatih Birol, told Reuters on Thursday that world economic growth may be hard hit if oil prices remain at today's high level.

If the prices continue at these levels for another year they will significantly slow world economic growth, he told Reuters in an interview.

The IEA kept its outlook for global oil demand growth this year and next steady from its previous report.

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