US and OPEC cut global oil demand forecast
According to monthly reports released by the US government and Opec, Global oil demand is looking weaker than previously forecast as the slowing economy continues to weigh on consumption.
The Organization of the Petroleum Exporting Countries trimmed its forecast for growth in world oil demand in 2013 by 30,000 barrels per day to 780,000 barrels per day and said the risk remains skewed to the downside. The producer group maintained oil supplies are adequate and pointed out this year's demand forecast has often been cut while saying the supply from producers outside the 12 member group has performed well.
The US Energy Information Administration also painted a looser picture of oil markets through 2013, cutting its 2012 estimate for demand growth by 45,000 barrels per day to 790,000 barrels per day and its 2013 estimate by 80,000 barrels per day to 920,000. It also boosted its supply estimates from non OPEC producers.
The EIA noted higher oil consumption in the US which was expected to rise by 100,000 barrels per day next year would be easily offset by declines in Europe and other OECD nations.
Oil markets have balanced concern about fuel demand against the threat of supply disruptions throughout the year with prices peaking at USD 128 per barrel in early March, the highest level since 2008. Brent crude prices have climbed to more than USD 114 per barrel in recent days, again stirring worries rising fuel costs could hit struggling global economies.
OPEC has maintained that supply is adequate and said in its report on Wednesday it was likely to stay so. It pointed out this year's demand forecast has often been cut, while saying that the supply from producers outside the 12 member group has performed well.
The report from OPOEC's Vienna headquarters said that "This trend is not expected to change in the coming year with the market continuing to be characterized by high volumes of crude supply and increasing production capacity."
Source - Reuters