By Brai Odion-Esene

WASHINGTON (MNI) – The U.S. Energy Information Administration
Wednesday lowered its estimate for oil revenues OPEC nations could earn
in 2010, perhaps reflecting uncertainties over oil demand and the
descent of oil prices into the low $70s range.

In a fact sheet based on projections from its June Short-Term
Energy Outlook, The EIA estimates OPEC net oil export revenues in 2010
to be $751 billion, less than the $783 billion it predicted in May’s
report.

The cartel’s revenue for 2011 is expected to hit $809 billion vs.
the $846 billion estimated in May.

In its own oil market report Wednesday, OPEC said given the slow
world economic recovery, world oil demand growth is forecast at 0.95
million barrels per day or +1.1%, in line with its previous forecast.

It added that the recent drop in prices to the low $70s appears to
reflect a shift in sentiment about the world economic recovery following
the emergence of the sovereign debt crisis in the Euro zone and initial
signs of moderation in the pace of economic growth in China, as the
government seeks to prevent overheating.

There is a need for an increasingly cautious approach when
evaluating the market developments, OPEC said, adding, “This will be
particularly important going forward, given the considerable
uncertainties facing the market for the remainder of this year.”

According to the EIA, OPEC from January to December last year
earned $573 billion in net oil export revenues, a decline of 41% from
2008.

Saudi Arabia, with $154 billion oil export revenues, had the
largest share of these earnings, the EIA said, representing 27% of the
total. At this point, OPEC net oil export revenues in 2010 total $314
billion.

So far in 2010, the EIA projects Saudi Arabia’s nominal revenues
from oil exports to be $86 billion. From January to May, it estimated
nominal net oil export revenues for OPEC to be $314 billion.

In its short-term energy outlook released Tuesday, the EIA said
uncertainty about economic growth in China and in the Euro zone has
continued to weigh on oil markets, and declines in equity markets have
led to fears that the economic recovery may not progress as fast as had
been hoped.

It projects WTI prices will average about $79 per barrel over the
second half of this year and rise to $84 by the end of next year.

A separate survey by Platts published Wednesday shows that OPEC
crude oil production rose averaged 29.28 million barrels per day in May,
up 70,000 barrels from an estimated 29.21 million b/d in April.

Excluding Iraq, which does not participate in the oil producing
group’s production agreements, output from the 11 members bound by
production limits fell by 60,000 barrels to 26.83 million barrels per
day in April.

Increases totaling 180,000 barrels per day from Iraq, Saudi Arabia,
Kuwait and the United Arab Emirates are offset by decreases totalling
110,000 b/d from Angola, Iran, Nigeria and Venezuela.

“This suggests that OPEC remains mostly unconcerned with
overproducing its notional output target by almost 2 million b/d,
particularly when prices are holding well into the $70s/barrel,” Platts
said.

OPEC Net Oil Export Revenues

Country Nominal ($B)

2009 2010 2011 Jan-May 2010

Algeria $42 NA NA $23
Angola $42 NA NA $24
Ecuador $6 NA NA $3
Iran $55 NA NA $30
Iraq $38 NA NA $20
Kuwait $46 NA NA $25
Libya $34 NA NA $18
Nigeria $46 NA NA $27
Qatar $24 NA NA $14
Saudi Arabia $154 NA NA $86
UAE $52 NA NA $28
Venezuela $33 NA NA $16
OPEC $573 $751 $809 $314

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

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