Global oil demand growth to plunge in 2013
London, August 12, 2012
Global oil demand growth will fall next year below already very weak levels of 2012 due to a slowdown in economic activity, according to the West's energy watchdog.
The outlook by the International Energy Agency (IEA) echoes similar pessimistic forecasts revealed this week by the US government and the Opec.
The IEA also said oil prices may remain elevated in the next few months as geopolitical tensions, including a stand-off between the West and Iran over Tehran's nuclear programme, offset the bearish impact of the weaker global economy.
'The geopolitical dimension is likely to continue to provide something of a floor for prices. The issue of Iran will likely continue to weigh heavy on the market through the second half of 2012,' the IEA said in its monthly report.
'Moreover, there is a risk that recent progress in restoring output from Libya, Iraq and Nigeria could be jeopardised if recent political and civil tensions worsen,' the report said.
Oil prices have plunged below $90 a barrel in June after Saudi Arabia stepped in to raise production to multi-year highs at a time when Iranian exports plunged because of Western sanctions.
Prices have recovered to above $110 a barrel in August supported by Iranian tensions and investors' hopes for new money printing programmes from global central banks to support the flagging economy.
The IEA said it had revised its forecast for oil demand growth in 2013 down by 150,000 barrels per day (bpd) to 830,000 bpd, below the growth of 870,000 bpd expected in 2012.-Reuters