Dwindling economy dries up oil demand
Faltering economic growth will undercut global oil demand this year and next, the International Energy Agency (IEA) said yesterday, citing slowdowns in China and the United States in particular.
"Sluggish economic growth could restrict annual oil demand growth to 0.9 million barrels per day in 2012 and 0.8mbpd in 2013, with demand averaging 89.6mbpd and 90.5mbpd," down from last month's estimates of 89.9mbpd and 90.9mbpd, respectively, the IEA said in its latest Oil Market Report.
The IEA highlighted slower demand in the United States and China, which together account for a third of the global market, while technical changes in its calculations also cut its 2012 forecast by 0.25mbpd.
The IEA, set up to advise developed countries on energy policy, reduced its 2013 economic growth forecast to 3.6 per cent from 3.8pc but left its 2012 estimate unchanged at 3.3pc.
The Chinese economy, which has driven demand for oil and other commodities for the past 20 years, was likely to grow 8.0pc this year, instead of 8.2pc, rising marginally to 8.1pc in 2013, rather than 8.5pc.
Chinese data this week bears out that picture, with the government expected to announce fresh stimulus measures to keep growth at around 8.0pc, the minimum necessary to provide enough new jobs to keep unemployment at bay.
The IEA put US growth next year at 2.0pc, down from the 2.3 estimate it gave in last month's report.
Global oil supply in July rose 0.3 mbpd from June to 90.7mbpd, representing an annual gain of 2.6mbpd, the IEA said.
OPEC July supply was put at 31.39mbpd, down marginally as lower output in Iran, Libya and Angola offset increased production in Iraq, Qatar and the United Arab Emirates, it added.
On Thursday, the Organisation of Petroleum Exporting Countries increased its global demand forecast marginally, to 88.72mbpd from 88.68mbpd in July.
Demand for 2013 was put at 89.52mbpd, up from 89.50mbpd last month, representing an increase of 0.81mbpd from 2012, it said.
OPEC warned at the same time of considerable uncertainty ahead, adding: "The gloomy picture could reduce the world oil demand growth forecast by 20pc next year."