| LONDON, Sept 12
LONDON, Sept 12 Global oil supplies look
comfortable despite a massive outage in Libyan output and oil
prices could see some downward pressure if sharp currency
depreciation in emerging markets leads to softer demand, the
International Energy Agency (IEA) said.
The IEA, which coordinates energy policies for developed
economies, said global oil supply was set to jump in the next
months thanks to a mix of seasonal, cyclical and political
factors and notwithstanding the Libyan problems.
"While the geopolitical storms in the Middle East and North
Africa have yet to pass, easing fundamentals look set to lessen
the pressure somewhat on market participants - at least for the
next few months," the IEA said in its monthly report.
Oil prices rallied to sixmonth highs in August amid
expectations of Western military strikes in Syria and as Libyan
production plunged to a tenth of capacity due to protests at
fields and terminals in the worst disruption since the 2011
But the IEA said even if Libyan production remained
disrupted for the rest of the year, the winding down of seasonal
field maintenance in the North Sea and the U.S. Gulf of Mexico
shall bolster supply in the fourth quarter of 2013.
"New North American production - including U.S. light tight
oil and Canadian synthetic crude - continues to surge. Saudi
production is hovering near record highs, even as a seasonal dip
in domestic air-conditioning demand looks set to free up more
barrels for export," it added.
The agency left its global demand growth estimates for 2014
broadly unchanged compared to its report last month at 1.1
million barrels per day, up from 895,000 bpd in 2013, as it said
the underlying macroeconomic situation improved.
Global oil demand is projected to average 92.0 million bpd
in 2014. But it said demand could see some downward pressure in
emerging economies whose currencies have depreciated steeply in
As oil is priced in U.S. dollars, when an oilimporting
country's currency falls versus the U.S. unit, its oil import
bill in the domestic currency rises.
Some currencies in Asia and Latin America have been hit
hardest by expectations that the U.S. Federal Reserve will slow
its bond-buying programme, which would lead to a strengthening
of the dollar.
The Indian rupee lost nearly onethird of its value in the
four months to the end of August and other countries such as
Indonesia, Malaysia, Peru, the Philippines and Thailand have
also seen their currencies weaken.
"If sustained, this may ultimately curb their demand trend
or, in countries where oil subsidies are in place, raise
pressure on their governments to reduce those subsidy
programmes," the IEA said.
(Reporting by Dmitry Zhdannikov and Christopher Johnson;
Editing by Dale Hudson)