Oil-producing group OPEC cut its global oil demand growth forecast for a fourth consecutive month, citing an economic downturn in developed countries and efforts by China and India to curb fuel consumption.
“The economic downturn is taking its toll on the world oil demand... The decelerating U.S. economy, high unemployment rate and feelings of uncertainty among consumers, has damped U.S. oil demand. Similarly, debt problems in the euro zone are causing EU economies to lose some of their estimated growth this year,” OPEC said in its monthly report on Tuesday.
The Organization of Petroleum Exporting Countries (OPEC) cut its 2011 global oil demand growth forecast by 180,000 barrels per day (bpd) to 0.88 million bpd – bringing its growth estimate below 1 million bpd for the first time this year.
Next year, OPEC still sees demand growing slightly faster – by 1.19 million bpd, down 70,000 bpd from its previous estimate in September.
On the bullish side for oil prices, OPEC said non-OPEC supply would be lower than expected this year, but demand was falling, thus reducing the pressure on OPEC to compensate for any supply loss.
OPEC cut its 2011 non-OPEC supply growth forecast by 140,000 bpd to 360,000 bpd due to lower output in Canada, the UK, Brazil and Azerbaijan.
In 2012, non-OPEC producers will still be able to increase supply by 830,000 bpd, mostly unchanged from OPEC’s estimate last month, due to high output from Brazil, Canada, Colombia and the United States.
OPEC said its own output fell by 77,000 bpd in September to 29.90 million bpd and should average around the same level in 2012 to meet demand on OPEC’s crude.