OPEC Expects Weak Oil Demand in 2013

OPEC Expects Weak Oil Demand in 2013

OPEC Expects Weak Oil Demand in 2013

According to a report from the Organization of the Petroleum Exporting Countries (OPEC), daily average demand for crude will slow down in 2013. OPEC said on Wednesday, that its current production will be enough to handle the demand for 2013 and if there is any growth in demand it will be aptly handled by non-OPEC producers. The report said the U.S., Canada, Brazil, Kazakhstan and Colombia are expected to account for most of the increased supply, while Norway, Mexico and Britain will see declines.

OPEC which produces a third of global oil, blamed Europe’s debt crisis, a weak U.S economic recovery, and slow growth in emerging markets like India and China as the likely reason for the expected fall in demand.

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“Besides the euro zone crisis, geopolitical tensions in the Middle East, the contraction of manufacturing in the U.S. for the first time since 2010 and decelerating economic growth in emerging markets have been fuelling uncertainties regarding global economic growth,” OPEC said in a monthly report.

“U.S. oil supply is expected to average 10.07 million bpd in 2013, an increase of 0.37 million bpd over 2012. This increase will be the highest among all non-OPEC countries and at the highest annual level since 1986”, OPEC said.

Its forecasts about oil demand is in line U.S. government’s, which on Tuesday cut its global oil demand growth estimate for 2013 by 360,000 bpd to 730,000 bpd. Citing secondary sources OPES said, Iranian production declined to 2.963 million bpd in June, the lowest in 20 decades, while Saudi Arabia increased its output to above 10.1 million bpd. OPEC kept its expected growth forecast for 2012 unchanged at 0.9 million bpd and forecasts 0.82 million bpd growth for 2013. For non-OPEC suppliers, supply is expected increase by 0.7 million bpd in 2012 and 0.9 million in 2013.

In a report last month only OPEC said it expects world oil demand to grow by 900,000 barrels a day in 2012.  In its monthly oil report for May, OPEC states that the stabilization of the U.S. economy and shutdown of Japanese nuclear power plants, has stopped declining demand at least for the short term.

Global oil consumption is now expected to increase by 700,000 barrels a day next year, about 400,000 barrels a day less growth than previously forecast,” Sieminski ,Energy Information Administration’s chief, said in a statement accompanying the report. “Most of the growth in oil demand next year will occur in China, the Middle East, and Brazil.”

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