* Leaves 2021 oil demand growth forecast at 5.90 million bpd
* OPEC December output rises by 280,000 bpd on Libya, UAE,
Iraq
* Extent of 2021 economic recovery uncertain as virus
persists
(Adds detail, context)
By Alex Lawler
LONDON, Jan 14 (Reuters) - The outlook for U.S. shale oil is
slightly more "optimistic" due to rising prices and output will
recover further in the second half of 2021, OPEC said on
Thursday, in a sign its policy of cutting output is helping
rivals pump more.
U.S. shale producers are not part of a pact between OPEC
nations and others including Russia - the so-called OPEC+ - to
reduce their output to support prices and reduce oversupply.
U.S. total oil supply will rise by 370,000 barrels per day
(bpd) in 2021 to 17.99 million bpd, the Organization of the
Petroleum Exporting Countries said in a monthly report, up
71,000 bpd from the previous forecast.
A significant rebound in shale could hamper efforts by OPEC
and its allies to support the market. Oil prices LCOc1 hit an
11-month high above $57 a barrel this week, supported by OPEC+
supply restraint and a voluntary cut by Saudi Arabia.
"The 2021 supply outlook is now slightly more optimistic for
U.S. shale with oil prices increasing, and output is expected to
recover more in the second half of 2021," OPEC said.
Also in the report, OPEC left its forecast for world demand
unchanged, saying oil use will rise by 5.90 million bpd this
year to 95.91 million bpd, following a record 9.75 million bpd
contraction last year due to the pandemic.
OPEC said there was upside potential in its forecast of 4.4%
economic growth in 2021, but new coronavirus variants, rising
infections and a slow start to vaccination programmes may cloud
the recovery at least for the first quarter.
"While a strong global economic recovery in 2021 remains
very likely, the depth and magnitude of this year's rebound
remains uncertain," OPEC said.
"The forecast will be thoroughly reviewed once more in the
coming month."
SMALL SHALE GAIN
For now, the shale rebound is small. OPEC expects U.S. tight
crude output, another term for shale, to rise by 70,000 bpd this
year to 7.37 million bpd and left its non-OPEC supply forecast
steady overall.
But rapid growth in the non-conventional oil supply has
caused problems for OPEC in the recent past.
Rising shale output, encouraged by OPEC's policy of cutting
supply to support prices, helped create a glut during 2014-2016.
This glut eventually prompted the creation of OPEC+, which began
to restrain output in 2017.
OPEC+ cut supply by a record 9.7 million bpd last year and
is pumping an extra 500,000 bpd in January under a plan to
unwind the curbs gradually. Most producers will hold steady in
February and Saudi Arabia is cutting output by 1 million bpd
next month and March.
The report showed OPEC output is increasing already. Output
rose by 280,000 bpd to 25.36 million bpd in December, it said,
driven by Libya, an OPEC member exempted from making cuts, plus
quota-bound countries Iraq and the United Arab Emirates.
The group forecast demand for its crude will be 27.2 million
bpd this year, also unchanged from last month. That would still
allow for higher average OPEC production in 2021.