OPEC is expecting record output in 2012 and continued strength into 2013 with help from the US.
The U.S. Energy Department has forecast a record $1.05 trillion as OPEC's net oil export revenues for 2012 compared with 2011's $1 trillion. This, in turn, has led to a US record average price for gasoline of $3.63 a gallon up $0.10 on 2011.
While OPEC is set for a further strong year in 2013, projections show earnings are likely to be down slightly at $955 billion. Consequently, this may be good news for the US, combined with the Energy Department prediction that US oil production will increase from 6.4 million barrels a day in 2012 to 7.1 million in 2013, the highest level since 1992. The increase reflects the nation's reduction in dependence on foreign crude.
According to reports, there are two potentially extreme scenarios for 2013. The first is global oil demand and a supply glut which will force OPEC to cut output and put a floor under crude prices. The alternative sees non-OPEC supply lower than expected, global demand strengthening and global political tensions increasing to leave OPEC struggling to meet the demand, thus causing a sharp escalation in oil prices.