Economic uncertainty to have less impact on oil demand - OPEC

16 January 2013 11:57  [Source: ICIS news]

LONDON (ICIS)--The impact of economic turbulence on oil demand is expected to be considerably lower than in previous years despite uncertainties hanging over the recovery of the global economy, OPEC said on Wednesday.

In its January monthly oil report, the cartel forecast oil demand growth at 800,000 bbl/ day, in line with the growth seen last year and unchanged from OPEC’s previous forecast.

World economic growth, meanwhile, is estimated at 3.0% in 2012 and 3.2% in 2013, also unchanged from previous forecasts, OPEC added.

“Following last month’s revision, US growth expectations for 2013 remain at 2.0%, down from an upwardly-revised 2.3% for last year,” the report said.

Despite recent data showing an improvement in the country’s economy, OPEC points to a lack of clarity over the outcome of talks to avoid the ‘fiscal cliff’ as a reason for the fall in growth.

“[This has] led to a deceleration in business spending and investments at the end of the year, as well as a decline in consumer confidence,” OPEC said.

The report estimates further economic growth in Japan, where fiscal and monetary stimulus might lift growth to 0.7%, after an estimated expansion of 2.0% in 2012.

OPEC also predicts a revival in the eurozone, which is forecast to recover to 0.1% after contracting by 0.4% last year.

Although oil demand growth in the OECD region is expected to continue to contract this year by 200,000 bbl/day, this is at only half the rate seen in 2012, OPEC said.

The non-OECD region is projected to consume about 1m bbl/day more than last year, with the transportation and industrial sectors expected to be the source of most of this growth, they add.

Demand for OPEC crude in 2012 declined by 200,000 bbl/day to reach 30.1m bbl/day. Required OPEC crude in 2013 is forecasted to decline further, to average 29.6m bbl/day.

Non-OPEC supply in 2013 is expected to increase by 900,000 bbl/day, the report said, with growth coming mainly from the US, Canada, South Sudan and Sudan, Brazil, and Australia.

By: Neha Popat
+44 208 652 3214

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