IEA cuts oil growth on global woes
London, February 11, 2012
Global oil demand will grow by less than one per cent in 2012, the International Energy Agency (IEA) said yesterday, cutting its oil growth demand forecast for a sixth consecutive month due to a weak global economy.
The agency, which provides energy advice to the world's most industrialised nations, cut its global oil demand growth forecast for this year by 250,000 barrels per day (bpd) to 800,000 bpd.
'This month's report dwells on recent economic downgrades, and resultant weaker oil products demand growth for 2012,' the IEA said. 'This is providing a ceiling for otherwise stubbornly-high crude prices.'
The IEA cited a cut by the International Monetary Fund (IMF) in its economic projections with the global economy now expected to expand by 3.3 per cent in 2012, a 'sharp deterioration' from its previously assumed 4pc growth.
The Opec also cut its world oil demand growth forecast on Thursday due to economic weakness, predicting a rise of 940,000 bpd in 2012, 120,000 bpd less than its forecast last month.
In contrast, the US Energy Information Administration raised its estimate of global demand growth in 2012 by 50,000 bpd to 1.32 million bpd in a report.
The IEA said oil demand in the most industrialised nations was expected to fall by 0.8pc, with petrol accounting for more than 40pc of the decline.
The latest preliminary statistics for December point to a sharp fall in North American oil demand, down 4.1pc year-on-year, despite reports of economic resilience.
The IEA linked this to sharp declines for heating oil and liquefied petroleum gas (LPG) thanks to an unseasonably mild winter in the US.
European oil demand is likely to post the greatest relative decline in 2012, the IEA said, down by 0.3 million bpd from 2011.
Despite the cuts in the forecasts, Opec supplies rose in January to the highest since October 2008.-Reuters