The International Energy Agency on Friday, July 13, trimmed its growth forecast for 2001 global oil demand by half a million barrels per day, but predicted an acceleration in 2002 if the US economy picks up.
The IEA said world oil demand would grow by 460,000 barrels a day to 76 million barrels a day (mb/d), against a prediction last month of 76.5 million barrels.
“Persistently low industrial output and faltering consumer demand are expected to limit demand growth to under 0.5 mb/d for 2001 for total demand of 76 mb/d," the IEA said in its monthly oil market report.
It forecast a contraction for the the third quarter of this year, with "world demand... down 0.2 percent from the same period last year."
"A turnaround in the US economy, now anticipated towards the end of this year, should cause demand growth to rebound to 0.8 mb/d next year," the report said.
”Growth would be stronger if oil prices eased," it noted.
"This is the seventh downward revision to our initial demand growth projection of 1.9 mb/d last summer, when US and global economic growth were expected to be robust."
It said the US will likely contribute the most to growth in demand next year, with China and the Middle East also needing more oil.
"Demand in the rest of Asia is expected to grow only marginally, dragged down by Japan's economic travails and the protracted effect of the US slowdown."
As for 2001, "second- and third-quarter declines are now expected to wipe out first-quarter gains in the Organization for Economic Cooperation and Development (OECD), leaving China and non-OECD oil producers as the main drivers of demand growth this year."
Production by countries outside the Organisation of Petroleum Exporting Countries (OPEC) was forecast to increase by 0.7 mb/d in 2002, on top of a gain of 0.6 mb/d this year.
"Russian output will continue to rise strongly, North American supply will be higher and North Sea production will be flat," the IEA said.
Within the OECD, Canada, Mexico and the United States will post production gains, while production in Australia, Norway and Britain will decline.
In non-OECD countries, Angola, Brazil, Equatorial Guinea and the Commonwealth of Independent States (former Soviet Union) will increase production, the IEA said, while Argentina, Colombia and Egypt will post declines.
In May, oil stocks held by OECD members rose by 1.41 million barrels to 2.6 billion barrels, it added. Peter Gignoux, an oil market expert with Schroder Salomon Smith Barney in London, said that the figures were undermining crude prices, which slipped back close to the $25 barrel mark late Friday morning. "The demand figures don't look all that good," he told AFP.
Despite weaker economic indicators, the IEA said the global economy was "in a much stronger position (in comparison to previous downturns) to weather the storm, but high crude oil and product prices are dampening growth and contributing to inflation." —(AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com)
