VIENNA (MNI) – The Organization of Petroleum Exporting Countries
(OPEC) said Tuesday it still expects supply from other oil producers to
outpace the rise in global demand next year by a small margin,
highlighting the downside risks to demand due to contagion from the
Eurozone crisis.
“The Eurozone debt crisis remains at the heart of the global
slowdown, which is also impacting emerging markets,” the organization
said in its Monthly Oil Market Report. It expects Eurozone GDP to
contract by 0.4% this year and recover by only 0.1% next year.
Projections for average growth in global oil demand this year were
tweaked marginally lower from +0.90 million barrels per day (mb/d) to
+0.85 mb/d (+1.02%) to 88.74 mb/d, mainly reflecting the base effect of
an upward revision for 2011. Next year, demand is seen rising by 0.8
mb/d to an average of 89.6 mb/d.
“Downside risks exist as the spillover from the slowing global
economy could reach some regions of the non-OECD,” the report cautioned.
Indeed, variables such as GDP growth, retail petrol prices and the
weather “could reduce the world oil demand growth forecast by 20% for
2013.”
Projections for non-OPEC supply were also broadly confirmed,
showing a 0.70 mb/d rise this year (revised up from +0.69 mb/d) to 53.15
mb/d and an increase of 0.94 mb/d (+0.92 mb/d) next year to 54.09 mb/d.
OPEC natural gas liquids and non-conventional oils are expected to
average 5.7 mb/d this year and 5.9 mb/d in 2013, representing growth of
0.4 mb/d and 0.2 mb/d, respectively
Projected demand for OPEC crude this year was left virtually
unchanged at 29.9 mb/d, down 0.2 mb/d from last year. Demand is still
seen declining by 0.4 mb/d next year to an average 29.5 mb/d.
Global oil supply edged up 0.30 mb/d in August to an average of
89.80 mb/d, according to preliminary estimates. Secondary sources
reported a 254,000 b/d rise in OPEC crude output to 31.41 mb/d, the
report noted.
OPEC attributed last month’s 10% surge in Brent prices and the 7%
gain for WTI to “the return of significantly higher speculative
activity, constraints in North Sea supply, declines in crude oil
stockpiles in the US, hopes for further monetary easing from major
central banks and geopolitical factors.” Favorable US economic data and
the supply risks from hurricane Isaac contributed as well.
– Paris newsroom +331 4271 5540: ssandelius@mni-news.com
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