Researchers at oil supplier’s club OPEC have warned of the increased potential for further curbs to oil demand growth in 2013.
In its monthly oil market report for August, based on July data, OPEC said that positive developments are keeping oil demand growth for 2012 at 0.9 mb/d as demand “has overcome earlier expectations of a declining momentum and moved to a more stabilized trend, supported by the summer driving season, the summer heat, and the continued shutdown of most of Japan’s nuclear capacity.”
The cartel is keeping oil demand forecasts for 2013 at 0.8 mb/d, though it says there is “considerable uncertainty surrounding the forecast for world oil demand growth” and “risks are currently seen to be skewed to the downside.”
Demand for OPEC crude for this year has been revised slightly down from the previous assessment, but remains at 29.9 mb/d. Demand for OPEC crude in 2013 is forecast to average 29.5 mb/d, a drop of 0.4 mb/d from the current year and representing a downward adjustment of 0.1 mb/d from July’s report.
In a report on emerging consumers, OPEC says China has doubled its oil consumption over the past 12 years, as advanced economies have trimmed back demand, shedding more than 4 mb/d since 2005. The Eurozone crisis is likely to remain a major source of uncertainty in the oil market during the second half of the year.
As a result, OPEC says oil prices have become increasingly sensitive to the economic conditions in emerging markets, and China in particular.
In supply, the latest OPEC figures from secondary sources show the ascendancy of Iraq and decline of Iran continues. Iran shed 173,000b/d of production between June and July, while Iraq produced an extra 115,000b/d, lifting Iraqi production to over 3 million b/d for the first time since 2002.
Saudi slightly trimmed production by 50,000 b/d to 9.9 million b/d, while the UAE and Kuwait broadly held production levels steady at 2.6 and 2.8 million b/d respectively.
