OPEC Mulls Trimming Demand Forecast: Report

OPEC officials are considering estimates that demand for the group's crude oil in 2012 could average 1 million barrels per day (bpd) less than their current output, suggesting it may start to look at trimming supply.

The board of governors of the Organization of the Petroleum Exporting Countries is meeting in Vienna this week, in preparation for the gathering of its oil ministers on Dec. 14 that will decide output policy.

OPEC ministers failed to reach agreement at their last meeting six months ago as Iran successfully opposed a move led by top exporter Saudi Arabia to raise OPEC quotas to meet a shortfall in supplies from Libya. Saudi Arabia and its Gulf Arab OPEC allies raised production anyway.

The 12 OPEC members are producing 29.9 million bpd, around the same as the forecast demand for their crude in 2012 and 2011, according to the most recent monthly report from OPEC's headquarters issued on Nov. 9.

But a delegate from a core OPEC country said on Thursday demand for OPEC crude may average 29 million bpd in 2012.

"Our estimates are lower than OPEC's numbers," the delegate said, declining to be identified by name.

Since OPEC's last meeting, Libya's production has started to recover and global demand forecasts have been revised lower due to a weaker economic outlook. Oil prices, while still above $100 a barre;, have fallen 14 percent from their 2011 peak of $127 reached in April.

Should the 12 OPEC members find consensus around a lower demand figure of 29 million bpd, that could lead to a compromise between the positions of moderate Arab Gulf members and price hawks such as Iran.

On Friday, Iran called on the Gulf Arab producers to reduce output back to pre-Libya crisis volumes, while a Gulf OPEC delegate said in response the market was still in need of the extra supply as Libyan output was not back to pre-war levels.

A second OPEC delegate said on Thursday Iran was unlikely to agree to a decision in December which kept OPEC output at 30 million bpd.

"Iran will not agree to a rollover because there is no need for the extra supply in the market and it might put pressure on prices," the delegate said.

Should all in OPEC agree on a lower estimate of the demand for OPEC crude, the prospect could increase of the group adopting a new output ceiling closer to its actual output.

OPEC set a target in December 2008 for 11 members,all except Iraq, to produce no more than 24.84 million bpd. With output more than 2 million bpd above that level, OPEC officials have said the target is obsolete.

The group's headquarters is scheduled to publish one more monthly report on Dec. 13 -- the day before its ministers meet -- which could further revise demand forecasts. (Editing by William Hardy)