OPEC leaves demand outlook unchanged
In its monthly Oil Market Report, the Organization of Petroleum Exporting Countries made no changes to its 2011 and 2012 oil demand forecasts.
In its monthly Oil Market Report, the Organization of Petroleum Exporting Countries made no changes to its 2011 and 2012 oil demand forecasts. OPEC expects worldwide oil demand to increase by 880,000 b/d this year to average 87.81 million b/d and to rise by 1.2 million b/d next year.
Next year’s oil demand growth is expected to come from outside the Organization for Economic Cooperation and Development, mainly China, India, the Middle East, and Latin America. Industrial users, particularly petrochemical users, and transportation demand will contribute the most to 2012 oil demand growth, OPEC forecasts.
North American oil demand is expected to shrink by 110,000 b/d in 2011, then rebound in 2012 by that same amount. In OECD Europe, OPEC expects oil demand to contract by 140,000 b/d this year and by another 80,000 b/d next year.
The OPEC report forecasts that OECD Pacific oil consumption will be mostly flat in 2011 and 2012, with marginal declines of 20,000 b/d and 40,000 b/d, respectively. However, projections are heavily dependent upon the speed of recovery in Japan.
Forecast economic growth in China is unchanged at 9% for 2011 and 8.5% for 2012. China’s 2011 oil demand growth is pegged at 440,000 b/d. India is forecast to see economic growth of 7.6% in both 2011 and 2012, in line with month-earlier expectations.
Developing countries will combine for a 620,000 b/d jump in this year’s oil demand, which includes growth of 190,000 b/d in the Middle East and 170,000 b/d in Latin America, OPEC forecasts.
Demand for OPEC crude in 2011 has been revised up by 100,000 b/d from the previous assessment to stand at 30 million b/d. At this level, the demand for OPEC crude is 300,000 b/d above the previous year. In 2012, demand for OPEC crude also is projected to average 30 million b/d, about 100,000 b/d higher than in the previous report and unchanged from the current year, according to the OPEC report.
OPEC said the continued increase in Libyan crude production combined with a potential recovery in North Sea output should result in a higher availability of light sweet crude for refiners. Moreover, weak demand growth in the advanced economies has kept OECD commercial stocks at about 57-58 days of forward cover, well above the 53-day level considered normal by the industry. Taking all of these developments together should ensure that the crude and product markets remain well supplied throughout the winter season and should limit any upward pressure on prices, the OPEC report said.