By Brai Odion-Esene

WASHINGTON (MNI) – With oil prices averaging close to $100 per
barrel for the majority of 2011, and the expectation that demand will
grow in the second half of this year, the U.S. Energy Information
Administration Tuesday predicted OPEC revenues collectively will break
above the $1 trillion mark this year and in 2012.

Given projected world oil demand growth and slowing supply from
countries that are not members of OPEC, the agency projects — based on
projections from its June Short-Term Energy Outlook — that nominal OPEC
net oil export revenues in 2011 will be $1.03 trillion vs. $778 billion
earned in 2010 — itself a 35% increase from 2009.

The cartel’s expected revenue for 2012 is projected even higher,
shooting up to $1.1 trillion.

So far this year — from January to May — the EIA estimates
nominal net oil export revenues for OPEC to be $416 billion.

Of those earnings, Saudi Arabia is expected to have the largest
share, with the EIA projecting that OPEC’s dominant member has taken in
$125 billion in nominal oil export revenues for the first five months of
2011.

Last year, the EIA said Saudi Arabia, with $225 billion, earned 29%
of total 2010 OPEC revenues, also the largest share.

At the time of writing, WTI NYMEX crude was trading at $98.99 and
in a range of $96.51 to $99.25 on the day. The EIA expects that WTI spot
prices, which averaged $79 per barrel in 2010, will average $102 per
barrel in 2011 and $107 per barrel in 2012.

It warned in its short-term energy outlook last week that it
expects oil markets to tighten “as growing liquid fuels demand in the
emerging economies and slowing growth in non-OPEC supply maintain upward
pressure on oil prices.”

Even OPEC warned of supply gap in the second half of 2011, saying
in its outlook report that “looking to the remainder of this year, the
expected supply/demand balance indicates a tightening market.”

In quarterly terms, OPEC predicted that global consumption is
projected to increase by 2.3 million barrels per day in the coming
quarter and to add a further 0.2 m million barrels per day in the
fourth. At the same time, however, non-OPEC supply and OPEC natural gas
liquids are only expected to add around 0.2 million b/d and 0.6 million
b/d in 3Q and 4Q respectively.

“This would result in much higher demand for OPEC crude, reaching a
level higher than current OPEC production and implying a draw in
inventories,” OPEC said. “Despite the inherent uncertainties in the
demand for OPEC crude stemming from both the supply and demand side,
this would leave a sizeable gap between current production and the
demand for OPEC crude.”

Despite this, OPEC members last week failed to reach an agreement
on raising output levels, with a bloc — led by Iran — rejecting a
Saudi Arabia-led proposal to increase production by 5.5 million barrels
over 2008 levels.

Saudi Arabia has since said that despite the OPEC stalemate, it
will increase production 13%, or about 1.14 million barrels per day, to
boost global supplies and help lower prices.

OPEC Net Oil Export Revenues

Country Nominal ($billions)

2010 2011 2012 Jan-May 2011

Algeria $53 NA NA $28
Angola $56 NA NA $28
Ecuador $8 NA NA $4
Iran $73 NA NA $38
Iraq $50 NA NA $28
Kuwait $60 NA NA $33
Libya $44 NA NA $9
Nigeria $65 NA NA $36
Qatar $37 NA NA $23
Saudi Arabia $225 NA NA $125
UAE $67 NA NA $39
Venezuela $41 NA NA $24
OPEC $778 $1,034 $1,117 $416

** Market News International Washington Bureau: 202-371-2121 **

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