VIENNA (MNI) – The Organization of the Petroleum Exporting
Countries said Wednesday it has revised down slightly its projection for
global oil demand growth this year but also trimmed its projection for
non-OPEC supply, resulting in higher expected demand for OPEC crude.
“Slower industrial production worldwide is pushing down the use of
oil by a large percentage, with middle distillate consumption plunging
in the past month,” the organization said in its Monthly Oil Market
“Should the current situation persist until year-end, then world
oil demand growth would be estimated at 0.8 mb/d, a downward adjustment
of 80 kb/d compared to last month’s estimate.”
In fact, the slightly weaker demand growth forecasts results
largely from the base effect of an upward revision for last year.
Average demand this year was actually revised up marginally to 88.81
Expected global economic growth this year was cut to 3.1% from
3.3%. “Assuming the deceleration will bottom out in the current quarter,
the forecast for 2013 has been left at 3.2%,” the report said.
The projection for global oil demand next year was left unchanged
at 0.8 mb/d. However, “the winter outlook represents further
uncertainties in the coming months,” the report acknowledged. “Risks to
the forecast for 2013 are primarily on the downside, due to the
turbulence in the world economy.”
At the same time, expected non-OPEC oil supply growth this year was
trimmed by 0.1 mb/d to 0.6 mb/d, “due mainly to lower-than-expected
supply from Brazil, Kazakhstan, China, Azerbaijan, and the UK,” it said.
Non-OPEC supply growth next year is still seen at 0.9 mb/d, “supported
by anticipated growth in the US, Canada, Brazil, and Kazakhstan, as well
as Sudan and South Sudan.” OPEC NGLs and non-conventional oils are
expected to increase by 0.4 mb/d this year and by 0.2 mb/d next year.
As a result, demand for OPEC crude for this year was revised up by
0.2 mb/d to 30.1 mb/d – still down 0.1 mb/d from last year. Expected
demand next year was revised up by a similar amount to 29.8 mbd.
“In September, total OPEC crude production averaged 31.08 mb/d,
according to secondary sources, representing a drop of 265 kb/d from the
previous month,” the report noted.
OPEC’s “reference basket” rose $1.15 or 1% in September to $110.67
per barrel. “Crude oil prices initially rose in anticipation of the
European Central Bank’s bond-buying program and the US Federal Reserve’s
announcement of a third, open-ended round of quantitative easing, but
then fell back on increasing concerns about the global economy and oil
demand growth,” it explained. “Reduced North Sea output, along with
geopolitical factors, has also helped to lift oil prices.” OPEC’s basket
stood at $109.46 on Tuesday, up from $107.94 on Monday.
“Product markets experienced an uptick across the barrel in
October, on the back of tightening sentiment fuelled by maintenance in
Europe,” the report noted. “Gasoline continued to take advantage of the
product tightness in the Atlantic Basin, which helped refinery margins
to continue to improve. In contrast, Asia’s product market eased as
increasing supplies caused cracks to retreat.”
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