PRODUCERS’ cartel Opec has cut its forecast for global oil demand growth next year because of a worsening economic outlook.
It also warned yesterday a disappointing economic performance in the US, the world’s top consumer, could further weigh on fuel use.
In its latest monthly report, Opec said concerns were easing about a tight oil market in the fourth quarter of the year and it expected Libyan oil output to return to full capacity in less than 18 months – more quickly than some estimates.
It added: “In the wake of reduced global economic growth, which has led to a downward revision in oil demand, the required crude supply has been revised down in the third and fourth quarters at a time when Opec crude oil production continues to increase and the partial return of Libya production is expected soon.”
World oil demand will increase by 1.06million barrels per day (bpd) in 2011, 150,000 bpd less than expected last month, the report said.
The growth estimate for 2012 was lowered by 40,000 bpd to 1.27million bpd.
Opec, whose 11 members pump more than one-third of the world’s oil, said a weaker-than-expected US economy could further reduce demand growth next year by 200,000 bpd.
It added the demand slowdown was not just in developed economies, with barely growing oil markets, but also in China and India, which are expected to drive the world’s future growth.
More Libyan oil is expected to come online soon after the ongoing civil war in the Opec member-country virtually halted output. Libya produced 1.6million bpd before the conflict.
Opec said supply was continuing to rise elsewhere in the cartel – Saudi Arabia, Kuwait and the United Arab Emirates unilaterally increased their production after Iran and other price hawks blocked a Saudi Arabia-led proposal in June to increase collective output.
The increase was prompted by forecasts of a looming gap between supply and demand this year.
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