Global Oil Outlook -- OPEC, Libya -- Implications for the Bakken

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Based on its latest monthly report, OPEC's production in October was about 750,000 barrels a day short of the average demand it sees for its crude in the fourth quarter.

Meanwhile, U.S. commercial oil inventories have been wearing thinner --down by 9.8 million barrels in October, suggesting the market is still slightly tightening despite Libya's return. But at the same time, continuous concerns in the euro zone show OPEC will still face a balancing act in the coming months. The group has downgraded its global oil demand growth forecasts four times in recent months and, although it didn't cut its prospects this month, has warned it could slash them again.

Furthermore, in the first half of 2012, amid lower seasonal consumption, demand for OPEC crude is expected to fall by over 1.3 million barrels a day compared to the fourth-quarter to an average of 29.29 million barrels a day. That's higher than OPEC's current production and will likely come amid higher Libyan production. So the numbers will likely give ammunition to those in the group calling for a reduction of Gulf production.

"The Saudis will cut whether they like it or not," said an OPEC delegate with a country that opposed an increase in June. "The conditions in the market dictate that."