* Expected 2014 drop in demand for OPEC oil not significant
* Rising shale oil output will not trouble OPEC
* OPEC meets to set policy on Dec.4
(Adds details on shale oil)
By Alex Lawler
LONDON, Oct 1 (Reuters) - OPEC's Secretary General said he
was comfortable with the market outlook for 2014 and a forecast
drop in demand for OPEC oil was not large, indicating the group
may not make big changes to output policy at a December meeting.
The Organization of the Petroleum Exporting Countries
expects demand for its crude to fall to 29.61 million barrels
per day (bpd) in 2014, down 320,000 bpd from 2013, due to rising
supply outside the producer group.
"It is not a huge drop in the call on OPEC," Abdullah
al-Badri told Reuters in an interview on Tuesday.
Referring to the market outlook he said: "Other than Libyan
outages I am very comfortable. I hope that Libya will solve the
problem before 2014, but I am comfortable now and comfortable in
2014 too, yes."
OPEC, which pumps more than a third of the world's oil,
meets on Dec. 4 to decide whether to adjust its output target of
30 million bpd. Badri himself would not be drawn on what OPEC
ministers would decide.
Supply from OPEC is almost exactly in line with the target,
falling to 30.07 million bpd in September, according to a
Reuters survey published on Monday. Output is at the lowest in
almost two years due to protests and strikes in Libya, and work
at Iraq's main export terminal.
Badri was attending the Oil and Money conference, an annual
gathering of senior industry executives. He told the conference
that a rise in shale oil output will not trouble OPEC.
North American output of tight oil, also known as shale,
plus natural gas liquids could reach almost 5 million bpd by
2018, and then it would decline, he said.
"I do not think that with this quantity OPEC is in trouble,"
Badri told the conference.
OPEC, sceptical of information available, has been looking
more closely at shale oil this year.
It decided in May to carry out its own investigation on
shale's potential and is expected to update its public forecasts
when it issues its annual World Oil Outlook in early November.
Already, the U.S. shale boom has altered the landscape of
oil trade. For example, OPEC members Nigeria and Algeria have
seen demand for their crude fall in the U.S., the world's top
consumer, because of growing domestic supply.
But this need not alarm core OPEC members such as Saudi
Arabia in the longer run, according to a senior International
Energy Agency (IEA) official also at the conference.
"In the next few years we will continue to see growth in
U.S. shale oil, which is very good news for the U.S. and the
rest of the world," IEA Chief Economist Fatih Birol told
"But I don't think that this has either the resource base or
the economics to replace Middle East oil," he added. The IEA
advises industrialised countries on energy policy.
Tight oil output would be in decline by 2018 and the cost of
such developments means that a sharp drop in oil prices would
restrain supplies, Badri told the conference.
"This tight oil is hanging on the cost. If the (price) were
to drop to $60 to $70, then it would be out of the market
Current prices, of $108 a barrel for Brent crude,
are at an acceptable level for producers and consumers, he said.
(Reporting by Alex Lawler, editing by William Hardy)