IEA cuts oil demand forecast on economy
London, November 10, 2011
World oil demand will be lower than expected this year and next as economic slowdown and high prices curb consumption, the International Energy Agency (IEA) said on Thursday.
The agency, which advises major industrialised countries on energy policy, said oil prices had been stubbornly high, helping restrain fuel use in the US, China and Japan in the third quarter and this trend could intensify if economic activity slowed.
'The demand picture could sour significantly should economic prospects falter,' the IEA said in its monthly Oil Market Report. The IEA cut its forecast for world oil demand this year by 70,000 barrels per day (bpd) to 89.16 million bpd, and reduced its 2012 demand projection by 20,000 bpd to 90.47 million bpd.
This brought the agency's forecast for global oil demand growth in 2011 down by 90,000 bpd, but increased its estimate of expected 2012 oil demand growth by 50,000 bpd.
Oil prices have been historically strong this year, averaging more than $100 per barrel, and this has kept a lid on consumption in many major economies.
Brent crude oil futures were trading around $113 at 1000 GMT on Thursday, compared with below $90 a year ago. IEA data show oil supplies have been fairly healthy with more output from members of the Organization of the Petroleum Exporting Countries (Opec).
OPEC crude oil output rose 95,000 bpd in October to 30.01 million bpd with more oil from Saudi Arabia and Angola. Libyan oil production had recovered 'far faster' than expected following the overthrow of former dictator Muammar Gaddafi and was now around 530,000 bpd, the IEA said.
The reactivation of Libyan oil facilities had been impressive, it said, noting that damage to infrastructure had been less dramatic than feared.
It projected Libyan oil output would reach 1.17 million bpd by the fourth quarter of 2012, 90,000 bpd more than previously forecast. This would still be well below Libyan output levels before the start of the country's civil war of 1.6 million bpd.
Overall, the IEA said its estimate of demand for Opec oil this year was 'largely unchanged' at around 30.5 million bpd but more supply from non-Opec producers would bring demand for Opec oil next year down to 30.4 million bpd.
Industry stocks of oil in the major industrialised countries had fallen by 11.8 million barrels in September to the equivalent of 57.9 days of future demand, the IEA said, but it noted that these stocks were still around 1.5 days above the five-year average.- Reuters