Opec Warns Oil Demand may Fall Short of Forecasts
LONDON — World oil demand growth could fall short of forecasts in 2013 due to economic weakness, and US supply will hit its highest in three decades, the Organisation of Petroleum Exporting Countries (Opec) said on Tuesday, curbing the need for oil from the 12-member producer group.
Opec’s monthly report left its forecast for growth in global oil consumption unchanged for now, still expecting an expansion of 840,000 barrels a day this year.
“However, there are a number of downward risks to this growth,” said the report, issued from Opec’s Vienna headquarters.
“The euro’s instability could lead to even deeper recession in some Mediterranean countries.
“And the potential impact of a full budget cut in the US could drag down the world economy, consequently reducing oil demand.”
Opec, the source of more than a third of the world’s oil, expects the US economy to expand by 1.7% in 2013, down from the 1.8% previously thought. Growth in the eurozone is now seen contracting by 0.2%, having earlier been expected to expand slightly.
“While the US economy continues recovering, it is mainly the sustained uncertainty about the budgetary negotiations in Congress that are holding back the momentum to continue at its full potential,” Opec said.
“The eurozone seems to continue to be significantly entangled in its sovereign debt crisis.”
Opec also trimmed its forecast for demand for its own crude in 2013 by 70,000 barrels a day due to rising supply from outside the 12-member group.
The non-Opec supply growth would again be driven by the US, which is enjoying a shale energy boom. Opec expects US oil supply to rise by 580,000 barrels a day to 10.59-million barrels a day in 2013, which it said would be the highest since 1985.
Opec’s own production rose by 74,000 barrels a day in February to 30.31-million barrels a day, according to secondary sources cited by the report, led by higher output in Iraq and Saudi Arabia.
The report from Opec is the first of this month’s trio of major oil outlooks to emerge. The US government’s Energy Information Administration is scheduled to publish its estimates later on Tuesday.
The International Energy Agency, adviser to 28 industrialised countries, issues its report on Wednesday.