(EnergyAsia, August 31 2011, Wednesday) — The International Energy Agency (IEA) has trimmed its latest forecast for world oil demand growth for 2011 by 100,000 b/d to 1.2 million b/d on account of high prices and slowing economic growth.
The Paris-based agency still expects the world to consume a record 89.5 million b/d this year, up by 1.4% from last year, as rising oil demand in the emerging markets will continue to more than offset the declines in the US and Europe.
For 2012, the IEA expects world oil demand to rise by 1.8% or 1.6 million b/d to another new high of 91.1 million b/d. This is due largely to an expected increase in Japan’s demand for oil to generate electricity to compensate for the loss of its nuclear power plants.
The IEA expects OECD oil demand to fall by 340,000 b/d to 45.8 million b/d in 2011 and to stay at the same level next year while non‐OECD demand will rise by 1.5 million b/d or 3.7% to 43.7 million b/d this year and by 1.6 million b/d to 45.3 million b/d in 2012.
In response to revised weaker demand growth, oil prices recently reached a three-month low.
“Concerns over debt levels in Europe and the US, and signs of slowing economic growth in China and India have spooked the market and raised fears in some quarters of a double‐dip recession,” said the agency in its latest monthly report.
The two leading marker crudes, Brent and WTI, have fallen around US$12 to US$15 a barrel since early August amid growing concerns over government debts and their likely impact on the global economy. Brent and WTI futures traded at around US$110 and $87 a barrel in late August, down sharply from the US$125 levels seen for Brent in late April.
Despite reports that the Gaddafi government has been overthrown, Libya’s oil production is unlikely to be fully restored to its pre-war level of 1.6 to 1.7 million b/d for years. Political instability could still disrupt production in a number of Middle East and African oil producers, leaving OPEC spare capacity down to a meagre 3.3 million b/d, said the IEA.