By Brai Odion-Esene

WASHINGTON (MNI) – After raising its 2010 forecast for both oil
prices and world oil consumption growth earlier Wednesday, the U.S.
Energy Information Administration has also revised upwards its estimate
for revenue OPEC nations could earn from oil exports, reflecting
better-than-expected growth in consumption by countries such as China
during the first half of this year.

In the report — based on projections from its October Short-Term
Energy Outlook — the EIA projects nominal OPEC net oil export revenues
in 2010 to be $741 billion vs. $731 billion estimated in last month’s
report.

The cartel’s expected revenue for 2011 was also revised up, to $818
billion from the $805 billion estimated in September. OPEC oil ministers
are set to meet in Vienna Thursday, and are widely expected to keep
current crude production quotas in place.

In its report, the EIA said it expects world oil prices to rise
gradually as global economic growth leads to higher global oil demand
and growth in non-OPEC oil supply slows in 2011.

The information arm of the U.S. Department of Energy noted that
while commercial oil inventories in OECD countries remain high, floating
oil storage has been declining, and “a gradual projected reduction in
OECD oil inventories over the forecast period should support firming oil
prices.”

Noting that West Texas Intermediate oil prices rose above $80 at
the end of September and into early October on positive economic news
and expectations of higher oil consumption, the EIA report raised the
average fourth quarter 2010 forecasted WTI spot price to $79 per barrel
compared with $77 per barrel in last month’s Outlook.

WTI spot prices are projected to rise to $85 per barrel by the
fourth quarter of next year. Projected WTI prices average $78 per barrel
in 2010 and $83 per barrel in 2011.

“EIA expects OPEC production will rise over the forecast period,”
the report said, “keeping oil prices from increasing dramatically.”

The EIA includes updated projections for world oil demand and
supply in its monthly outlook, and this month, mainly due to
stronger-than-expected growth in oil demand during the first half of
2010 in China, it revised up slightly to 1.7 million barrels per day its
projection for 2010 world oil demand.

Projected global oil consumption growth in 2011 is 1.4 million
barrels per day, unchanged from last month’s outlook.

The U.S. in particular, the EIA projected, will see its liquid
fuels consumption grow by 1.1% in 2010 and 0.6% in 2011 “as all of the
major petroleum products register consumption growth.”

According to the EIA, OPEC from January to December last year
earned $571 billion in net oil export revenues, a decline of 41% from
2008.

Of the earnings predicted for OPEC this year, Saudi Arabia is
expected to have the largest share. So far in 2010, the EIA projects the
nominal oil exports revenues of OPEC’s dominant member to be $146
billion. From January to September, it estimated nominal net oil export
revenues for OPEC to be $547 billion.

According to OPEC’s own oil market report published Tuesday, its
total crude oil production averaged 29.08 million barrels per day in
September, down around 30,000 barrels from the previous month. If
production by Iraq is excluded, OPEC crude oil production averaged 26.67
million barrels per day in September, a decline of 0.14 million barrels
from the previous month.

OPEC Net Oil Export Revenues

Country Nominal ($B)

2009 2010 2011 Jan-Sep 2010

Algeria $42 NA NA $40
Angola $42 NA NA $41
Ecuador $6 NA NA $5
Iran $53 NA NA $52
Iraq $38 NA NA $35
Kuwait $45 NA NA $42
Libya $34 NA NA $32
Nigeria $46 NA NA $48
Qatar $24 NA NA $26
Saudi Arabia $153 NA NA $146
UAE $53 NA NA $49
Venezuela $33 NA NA $30
OPEC $571 $741 $818 $547

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

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