Opec cut its forecast for global oil demand growth next year because of a worsening economic outlook and said a disappointing economic performance in top consumer the United States could further weigh on fuel use.
The Organisation of the Petroleum Exporting Countries, in a monthly report on Monday, also said concerns were easing about a tight oil supply and demand balance and that it expected Libyan oil output to return to full capacity in less than 18 months, more quickly than some estimates.
"The weaker economic recovery is negatively impacting oil demand," Opec said in the report. "Looking ahead, the perception of market tightness and worries of supply shortages in the fourth quarter appear to be easing." --- Disappointing US economy could further cut 2012 demand --- Says demand slowdown also affecting China, India --- Sees Libyan oil output fully restored in 18 months.
Deepening concerns over Europe's sovereign debt crisis and slowing global growth are weighing on oil prices, which on Monday were trading around $111 a barrel, some $16 below their 2011 high reached in April. World oil demand will increase by 1.06 million barrels per day (bpd) in 2011, Opec said in the report, 150,000 bpd less than expected last month. The growth estimate for next year was lowered by 40,000 bpd to 1.27 million bpd.
Opec, whose 11 members pump more than a third of the world's oil, said the demand slowdown was not just in developed economies with barely growing oil markets but also in China and India, which are expected to drive the world's future growth. The report said a disappointing performance by the US economy, still the world's largest oil consumer, could further reduce demand growth next year by 200,000 bpd.
Opec's reduction in next year's demand growth forecast is smaller than that of the US government's Energy Information Administration, which last week cut its estimate by about 250,000 bpd to 1.39 million bpd. Another closely watched oil report is due on Tuesday from the International Energy Agency, adviser to 28 industrialised countries. The IEA expects consumption to climb by 1.61 million bpd in 2012, the highest of the three top forecasters.
Opec's view on how quickly Libya can resume its oil output is more optimistic than some. Wood Mackenzie, an oil consultant, said in August it could take as long as three years to recover fully. Libya's interim prime minister said on Sunday the country had started producing oil again. The civil war virtually halted output in the Opec member-country, which pumped 1.6 million bpd before the conflict.
The report also showed supply is continuing to rise from the rest of Opec. Saudi Arabia, Kuwait and the United Arab Emirates unilaterally increased their production after Iran and other price hawks within Opec at a meeting in June blocked a Saudi Arabia-led proposal to increase Opec's collective output.
The increase was prompted by forecasts of a looming gap between supply and demand this year. According to secondary sources cited by the Opec report, Opec supply rose by 75,000 bpd in August to 29.92 million bpd. With demand lowered sharply - Opec cut the demand forecast for its own crude by 480,000 bpd to 30.54 million in the third quarter - the report now points to a more comfortable balance between supply and demand in the second half of the year. Monday's report implied the gap between supply and demand had narrowed to 680,000 bpd in the second half from 1.25 million bpd in July and June's forecast of 1.73 million bpd.
Comments
Comments are closed.