(EnergyAsia, October 31 2013, Thursday) — The Organisation of Petroleum Exporting Countries (OPEC) has kept its latest October forecast for global oil consumption virtually unchanged over the next two years.
For 2013, it has maintained that the world will consume 89.74 million b/d while raising its expectations for 2014 by just 1,000 b/d to 90.78 million b/d over its September forecasts.
The cartel also kept unchanged its forecasts for the world economy to grow by 2.9% in 2013 and 3.5% next year.
It expects the economies of Japan and Europe to grow at a slightly faster rate compared with its previous forecasts in September, while downgrading the pace of growth in India and the US.
“The re-emergence of fiscal uncertainty in the US has led to a revision of the 2013 growth forecast to 1.6% from 1.7%,” said OPEC.
“Japan continues its expansion backed by ongoing momentum in exports and local stimulus measures. The 2013 forecast has been revised from 1.7% to 1.9%.”
OPEC said Asia’s contribution to oil demand growth has begun to show signs of waning.
Apart from slowing down during the monsoon season, Asia’s oil demand growth over the coming months is likely to be affected by the reduction in diesel subsidies in several countries such as Indonesia and Malaysia.
The rising use of coal and natural gas as substitute fuels for power generation, particularly in Japan and South Korea, has also dented product consumption.
At the same time, OPEC said global product markets are likely to see increasing supply due to additional export volumes, mainly from China, India, Russia, the US and Saudi Arabia. The middle distillate market in particular is expected to be negatively impacted given the new hydro-cracking capacity coming on stream.
“Despite the more positive outlook for the US and Europe, global product markets are expected to come under pressure over the winter season. The combination of sluggish demand and increasing product supplies are likely to dampen margins, leading to lower refinery runs over this period,” it said.