* Leaves 2014 world oil demand growth forecast unchanged
* Libya, Iraq contribute to lower OPEC supply in December
* Some output recovery expected in 2014, Saudi response key
(Adds details, quote from paragraph 3)
By Alex Lawler
LONDON, Jan 16 OPEC has lowered its oil output
further and is pumping less than this year's global need for its
crude, the exporter group said on Thursday, underlining the toll
that outages in Libya and elsewhere are taking on production.
The monthly report from the Organization of the Petroleum
Exporting Countries kept unchanged its global supply and demand
forecasts, which point to a smaller market share for OPEC in
2014 due to increasing supply from non-OPEC countries.
But OPEC, which pumps a third of the world's oil, is
relatively upbeat on economic prospects, seeing faster growth in
2014 of 3.5 percent, up from 2.9 percent in 2013 as monetary
"Further advances throughout the year could be possible, but
some downside risk remains," said the report by economists at
OPEC's headquarters in Vienna.
For now, OPEC expects demand for its crude oil in 2014 to
average 29.58 million barrels per day (bpd), virtually unchanged
from the previous estimate.
According to secondary sources cited by the report, OPEC
lowered its own output to 29.44 million bpd in December, below
this year's forecast demand.
This suggests there will no surplus crude in the market in
2014 should OPEC keep output at December's rate, although that
is unlikely should output recover in Iraq, Libya and Iran.
Already in 2014, Libya's output has partly recovered after
being curbed for months by protests and strikes and Iran's deal
with Western powers over its nuclear programme has raised the
prospect of higher oil exports.
Rising output would require output cuts from top OPEC
exporter Saudi Arabia, say analysts. Riyadh pumped at a record
rate above 10 million bpd in 2013 to compensate for outages and
has since throttled back.
According to secondary sources cited by OPEC's report,
Riyadh cut back its output to 9.62 million bpd in December,
while Saudi Arabia told OPEC it raised supply to 9.82 million
OPEC has yet to see any uptick in global oil demand. It
expects world consumption to rise by 1.05 million bpd in 2014,
virtually unchanged and less than the increase in supply from
countries outside the group.
Another closely watched report on global oil supply and
demand, from the International Energy Agency which advises
industrialised countries, is due on Tuesday.
(Reporting by Alex Lawler; editing by William Hardy)