IEA raises global oil demand growth forecast for 2013, 2014

14 November 2013 11:43  [Source: ICIS news]

IEALONDON (ICIS)--The International Energy Agency (IEA) raised its global oil demand growth forecasts for 2013 and 2014 on Thursday but said US and China are likely to face considerable uncertainties next year.

The projection of global demand growth for 2013 was raised by 45,000 bbl/day, to 91.0m bbl/day on a spate of higherthananticipated third-quarter demand data.

“Europe accounted for the bulk of the upward revisions, led by Germany, France, the UK, Italy and Turkey,” the IEA said in its most recent oil market report.

Overall demand growth for 2013 is now forecast at 1.0m bbl/day as reduced expectations of economic growth was partly offset upward revisions to third-quarter demand, it added.

The IEA also said demand growth of around 1.1m bbl/day is forecast for 2014, a slight increase from the previous oil market report, as the macroeconomic backdrop likely improves against 2013.

“A gradual restart of idled Japanese nuclear power generation capacity and the assumption of a return to more normal winter weather limit the upside for 2014,” the IEA said.

However, the demand outlook for the world’s two largest economies, the US and China, has been reduced for 2014, reflecting lower expectations of economic growth from the IMF.

“GDP growth of 2.6% is forecast for the US in 2014, but the unresolved US debtceiling question could test this momentum. The outlook for China’s efforts at transitioning from an exportdriven economy to one more focused on domestic consumption is equally uncertain and could test the IMF’s prediction of 7.3% GDP growth in 2014,” the IEA said.

The IEA’s oil market report also pointed out that despite the slight upward revision to oil demand growth, the gains in oil supply growth will outstrip the gains in demand.

Global oil supply grew by 600,000 bbl/day in October to 91.8m bbl/day, with a surge in non-OPEC supply balancing out falling OPEC production.

OPEC supply fell for a third consecutive month in October, primarily because of reduced production from swing producer Saudi Arabia. Total non-OPEC supply is forecast at 1.30m bbl/day in 2013 and 1.80m bbl/day in 2014.

Additional reporting by Franco Capaldo

By: Kawai Wong
+44 20 8652 3214

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