(c) 2013, Bloomberg News.

(c) 2013, Bloomberg News.

LONDON Even with OPEC forecast to keep its output quota unchanged at a meeting this week, falling oil demand and prospects for increased supply from some member states mean the group's leader, Saudi Arabia, will have to cut production anyway.

The kingdom and its allies Kuwait, Qatar and the United Arab Emirates will need to produce about 2 million barrels a day less in 2014 to prevent a glut, the Centre for Global Energy Studies predicts. That's equal to annual revenue of about $80 billion at Monday's prices. The 12-nation group meets in Vienna on Dec. 4 and will reaffirm its collective limit of 30 million barrels a day, according to 22 of 24 analysts and traders surveyed by Bloomberg News.

OPEC is already producing above target, even with output disrupted in member states Iraq, Libya and Iran. Demand for the group's crude will decline by about 900,000 barrels a day in 2014 as the U.S. pumps the most in almost a quarter century, the International Energy Agency says. A glut would lower prices that are averaging more than $100 a barrel for a fourth year, curbing revenue for Persian Gulf nations that on average rely on the sales for about 80 percent of government revenue.

"Next year OPEC's going to have to act," said Seth Kleinman, the head of energy strategy at Citigroup Inc. in London. "There's a lot of crude that's coming. Iraq is coming in 2014, there's no sign of the U.S. stopping, and you have to believe you're going to see more leakage from Iran. It could be anywhere from 1 million to 2 million barrels a day that the market could be looking for Saudi Arabia" to cut, he said.

Brent, the benchmark grade used to price much of the crude produced by the Organization of Petroleum Exporting Countries, averaged $108.55 a barrel this year, the third-highest level in data starting in 1988. Futures traded on the ICE Futures Europe exchange in London will average $105 in 2014, according to the median of 30 analyst estimates compiled by Bloomberg.

Prices rose 62 cents, or 0.6 percent, to $110.31 a barrel as of 3:53 p.m. in London. Goldman Sachs Group Inc. says Brent will drop to $108 in three months and $105 in 12 months. Hedge funds and other speculators cut their net-long position, or bets on higher prices, to the lowest this year last month, bourse data show.

OPEC exceeded its production target ever since it was set two years ago. The group pumped 30.01 million barrels a day in November, with Saudi Arabia supplying about 33 percent of the total, according to a monthly Bloomberg survey. OPEC hasn't published individual national allocations since the last time it formally announced an output cut in December 2008.

Iraqi Oil Minister Abdul Kareem al-Luaibi and Angola's Jose Maria de Vasconcelos said on Nov. 10 in Abu Dhabi they don't see any need for the organization to change its target. Saudi Arabian Oil Minister Ali al-Naimi, de facto leader among OPEC officials, has yet to publicly express a view.

Iraq plans to boost production by 500,000 to 750,000 barrels a day in 2014 and will almost triple daily output to 9 million barrels by the end of the decade, Deputy Prime Minister Hussain Al-Shahristani said in South Korea on Oct. 16.

Iran agreed Nov. 24 to restrict nuclear work for six months in exchange for an easing of international sanctions. The nation, once OPEC's second-biggest member, is producing about 1 million barrels a day less than at the start of 2012.

Libya may restore 1 million barrels of daily production next year as the holder of Africa's biggest reserves recovers from protests that have halted oilfields and closed export terminals, the London-based Centre for Global Energy Studies, or CGES, predicts. The group was founded by former Saudi Oil Minister Sheikh Ahmad Zaki Yamani.

"It is hard to imagine another year with similar disruptions," said Francisco Blanch, the head of commodities research at Bank of America Corp. in New York. "Iraq's production already rebounded nicely and is set to see further growth next year. The potential return of Libyan and Iranian oil could thus significantly exacerbate the surplus."

Supplies from Libya, Iran and Iraq aren't likely to rebound enough to force Saudi Arabia and its allies into making substantial cuts, Societe Generale SA says.

"It's hard for me to see both Iran and Libya coming all the way back online at the same time," said Mike Wittner, Societe Generale's head of oil research in New York. "It's a scenario that people talk about, but an unlikely one. Iraq has disappointed more often than not."

Oil markets will be affected by the possibility of easing sanctions on Iran, Deutsche Bank AG said Monday in an e-mailed note. "This will mark the first test for OPEC members on making room for ramped up Iranian oil exports," it said.

Global oil demand growth will remain "modest" in 2014, at 1.2 percent, lagging behind a "robust" expansion in supplies outside OPEC, the IEA said in a report Nov. 14. World economic growth will accelerate to 3.6 percent next year, from 2.9 percent in 2013, the International Monetary Fund says.

Saudi Arabia may delay any cuts to preserve its market share and signal its unease with improving relations between Iran and world powers, said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a London-based consultant.

Accepting lower prices would allow Saudi Arabia to curtail any increase in revenue for Iran, its regional rival, said Leo Drollas, the chief economist at the CGES. Still, there is a danger of a "death spiral" in prices and that means the kingdom is more likely to choose cuts, he said. Brent slumped to $9.55 in 1998 after OPEC chose to raise output.

Saudi Arabia will trim output to 9 million barrels a day if needed, JBC Energy GmbH said Monday in a report. If more drastic action is required, "we believe that OPEC members would set their differences aside and act as one, like they did in 2009," the Vienna-based researcher said.

Cheaper crude also would challenge expansion plans for U.S. producers of shale oil, which costs more to extract than most OPEC grades, said Torbjoern Kjus, a senior oil analyst at DnB ASA in Oslo. U.S. oil output reached 8.02 million barrels a day in the week ended Nov. 22, the most since 1989, according to data from the Energy Department.

Saudi Arabia needs a minimum average oil price of $85 a barrel to cover its spending needs this year, assuming the kingdom produces at a rate of 9.6 million barrels a day, according to CGES. Cutting production by 1.5 million barrels a day would avert a price collapse and still ensure a budget surplus of about $17.5 billion, CGES estimates show.

"Looking at the politics, they might want the price to slide to keep the Iranians weak," Drollas said. Still, "the Saudis being naturally cautious, they'll trim production to keep the market in balance. They care about the oil price even more than they care about the arch enemy."

_ With assistance from Sherry Su and Lananh Nguyen in London.