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The International Energy Agency Tuesday cut its
forecast for oil demand in the last quarter of this year and said the state of
the global economy will limit consumption expansion in 2013.
In its monthly market report, the Paris-based
energy watchdog for 28 industrialised nations including Ireland, downgraded its
forecast for global oil demand by 290,000 barrels a day to 90.1m barrels a day
as a result of economic weakness in Europe and the fallout from recent Hurricane
Sandy in the US.
For 2012 as a whole, the IEA now estimates
average daily demand at 89.6m barrels, slightly above the 88.9m barrels demand
The Organisation of the Petroleum Exporting
Countries (OPEC), the producers' cartel, last week cut its demand forecast for
next year by about 20,000 barrels a day to 89.57m barrels a day (b/d ), saying
that "the economy is placing a considerable amount of uncertainty on the world
oil demand forecast."
Including Tuesday's adjustment, the IEA has cut
its estimates for fourth-quarter demand by 850,000 barrels a day over the past
Demand next year would increase by 870,000 b/d to
a total of 90.4m b/d - - 100,000 b/d less than in last month’s forecast.
Global oil supply rose by 800,000 b/d in October, to
90.9m b/d. The IEA said there was a slight fall in supplies from OPEC, the
producers’ group, but that was offset by a rebound in the Americas and the North
Sea. Iranian production rose a little last month, reversing a seven-month
The IEA said Monday that the
US will overtake Saudi Arabia as the world's largest oil producer by 2020 due to
a boom in shale oil.
US oil production peaked in 1970 at slightly
more than 9.63m barrels a day. Except for a modest recovery to fewer than 9m
barrels a day in 1985, US crude production had been on a sharp decline until
2008, when it bottomed out at 5m barrels a day. By 2015, US oil production is
expected to rise to 10m barrels per day and increase to 11.1m barrels per day by
Brent crude for December delivery is down $1.02
to $108.05 while Nymex crude is at $85.35, down 22 cents.
Highlights of the latest OMR (Oil Market Report)
dated: 13 November 2012
Oil futures prices fell to four-month lows in late October and early
November amid mounting
pessimism over the global economic outlook. Prices fell further after the US
presidential election on worries over the so-called US ‘fiscal cliff’ looming at
end-year, with Brent last trading at $109.25/bbl and WTI at $86/bbl.
The forecast of 4Q12 global oil demand has been cut by 290 kb/d since
last month’s report, to 90.1 mb/d, reflecting persistent weakness in
Europe and the impact of Hurricane Sandy in the US. The 2012 growth forecast has
been reduced by 60 kb/d to 670 kb/d.
Non-OPEC production rebounded by 840 kb/d in October, to 53.4 mb/d,
after seasonal maintenance and weather disrupted output in September. Non-OPEC
supplies are expected to grow by 460 kb/d in 2012 and by 860 kb/d in 2013, to
OPEC crude oil supply dipped by 30 kb/d to 31.15 mb/d in October,
a nine-month low, even as Iran halted a seven-month supply downtrend with a
small rebound. The 'call on OPEC crude and stock change' for 4Q12 has been
lowered by 500 kb/d, to 30 mb/d, due to a weaker demand outlook and a stronger
forecast of non-OPEC supply.
September OECD total oil commercial inventories increased by a steep,
counter-seasonal 15.2 mb in September, extending six months of builds,
to 2 746 mb. Forward demand cover stood at 59.6 days, flat with an upwardly
revised August estimate. Preliminary data indicate OECD oil stocks rose by 5.5
mb in October.
Global refinery throughputs averaged 75.9 mb/d in 3Q12, as
recovering Chinese runs and strong OECD margins, notably in Europe, offset US
hurricane outages. A seasonal dip is expected to leave 4Q12 runs at 75.5 mb/d.
Annual growth is projected to rise to 1.1 mb/d in 4Q12 from 0.6 mb/d in 3Q12.
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