The Organisation of the Petroleum Exporting Countries (Opec), which produces a third of global oil, said healthy output levels from non-Opec producers next year would be enough to cover the modest growth in demand without the need for Opec itself to increase output.
“Besides the eurozone crisis, geopolitical tensions in the Middle East, the contraction of manufacturing in the US 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.
Opec left its 2012 world oil demand growth forecast unchanged at 0.9mn bpd and said growth in 2013 would slow to 0.82mn bpd.
“The fact that the departure of Greece from the eurozone, with a severe impact on the eurozone economy, still cannot be ruled out remains a cause of concern,” Opec said.
“Such an action would provoke a massive capital outflow from the country and result in a default of its fiscal obligations, with a destabilising effect on the eurozone and beyond.”
The group’s forecasts are close to those of the US government, which on Tuesday cut its global oil demand growth estimate for 2013 by 360,000bpd to 730,000bpd.
Opec forecast non-Opec supply to rise by 0.7mn bpd in 2012 and 0.9mn in 2013.
“US oil supply is expected to average 10.07mn bpd in 2013, an increase of 0.37mn bpd over 2012. This increase will be the highest among all non-Opec countries and at the highest annual level since 1986”, Opec said.
Demand for Opec’s own crude is expected to average 29.6mn bpd in 2013, almost 2mn below its June production levels of 31.36mn.
Opec also cited secondary sources as saying Iranian production was down to 2.963mn bpd in June, the lowest in more than 20 decades, while Saudi Arabia had ramped output back to above 10.1mn bpd.
Average oil prices were the highest on record in 2011 and earlier this year appeared to be heading for new records due to fears over supply disruptions from Iran amid Tehran’s standoff with the West over its nuclear programme.
But prices fell steeply from May to below $100 per barrel due to concerns about the global economy.
Opec said it based its 2013 oil demand forecast on assumptions including a slowing in world GDP growth from 2012, normal weather, flat US oil demand, 8% growth in the Chinese economy and a slowdown in the economies of the Middle East.
If the US economy grows a bit stronger next year, oil demand may grow by 1mn bpd, according to Opec’s optimistic scenario. The pessimistic scenario sees oil demand growing by a mere 0.65mn bpd should recovery in developed economies prove more difficult.
Analysts said they agreed with the modest oil output growth forecast from Opec and added it would not necessarily mean depressed oil prices in 2013.
“The supply system is very close to its limits and that will not change,” David Wech from JBC Energy consultancy said.
“We see a very limited supply cushion - probably at around 1.5 to 2.5mn bpd — and that is not enough bearing in mind potential supply outages,” he said, citing Iran, Libya and Norway as recent examples of outages.
Wech predicted demand growth of 1.1mn bpd in 2013, while Seth Kleinman at Citigroup put the figure at 0.9mn bpd and analysts from Barclays at 1.16mn bpd.
Opec’s reference crude oil basket edged lower to $96.43 a barrel on Tuesday, from $96.92 the previous session.
from gulf times.