IEA sees continued sluggish oil demand growth
BY JENNY GROSS
PARIS -- The International Energy Agency has slightly raised its forecast for oil demand for 2013, but said the tepid rate of global economic expansion would keep demand relatively sluggish.
In its monthly market report, the Paris-based agency, which represents major energy-consuming nations, upped its forecast for global oil demand in 2013 by 110,000 bopd to 90.5 MMbopd.
The IEA said emerging markets continue to dominate growth, five of the top-10 oil consuming nations now are non-OECD countries.
As OPEC ministers meet in Vienna Wednesday, the report shows how growth in oil demand is shifting to emerging market economies and away from the world's developed economies. Oil prices have stayed consistently high, despite declining growth in Europe and in the U.S.
The picture of weak demand comes at a time when production from countries outside the Organization of the Petroleum Exporting Countries is projected to rise at its highest growth rate since 2010, the IEA said. The growth of shale oil in the U.S. is driving the growth in overall output, which is expected to rise to 54.2 million barrels a day. This is 70,000 bopd higher than the previous forecast.
Oil demand in Europe fell steeply in the third quarter of 2012, by 895,000 bopd, the sharpest quarterly average drop since the start of the financial crisis in 2008. The IEA said cash-strapped consumers reduced consumption while a weakening euro to the dollar made oil products more expensive.
Russian oil production rose by another 60,000 bopd to a new post-Soviet record high of 10.9 MMbopd in November, the report said.
OPEC ministers said Tuesday they were happy with current oil prices and demand. In a separate report Tuesday, however, it said "weakness in the global economy is causing a great deal of uncertainty for the forecast for world oil demand, which has a downward risk, especially in the first half of the year."
Iranian output edged lower to 2.7 MMbopd in November from last month because of increased sanctions against the oil industry and shipping constraints. The IEA said production may fall further in December.
Dow Jones Newswires