Oil demand outlook trimmed, OPEC squeezed

August 9, 2013
Traffic backs up at the toll plaza to the San Francisco-Oakland Bay Bridge on July 2, 2013/AFP
Traffic backs up at the toll plaza to the San Francisco-Oakland Bay Bridge on July 2, 2013/AFP

, PARIS, August 9 – The International Energy Agency trimmed its outlook for oil demand over the next 18 months and highlighted threats to the dominance of OPEC, in a report on Friday.

The IEA said that new data on the difficulty the global economy is having in picking up speed meant that demand for oil would grow by slightly less than it had foreseen in July.

But the critical underlying factors are the rise of North American shale energy and the threat this poses to OPEC, the IEA said, referring to debate over whether OPEC may have had its day.

The agency said that it was trimming its forecast for growth of global oil demand this year by 30,000 barrels per day to 895,000 barrels per day because the International Monetary Fund had lowered its forecast for growth of the global economy from 3.3 percent to 3.1 percent.

The speed at which oil demand would pick up next year had also been reduced to 1.1 million barrels per day from 1.2 mbd because economic growth now looked like being 3.8 percent instead of 4.0 percent.

However, US demand had risen firmly in the first six months, but in the long term was expected to edge down, whereas production of shale oil and gas was rising fast.

In the first six months of the year, US demand had shown the strongest growth since the first quarter of 2011.

In London the price of Brent North Sea oil rallied by 72 cents to $107.40 per barrel on firm data for the Chinese economy.

The IEA forecast in November that the United States could become the biggest oil producer, ahead of Saudi Arabia, by 2017, and spoke in May of a shale energy “shock” to energy markets.

On Friday it said that in July non-OPEC oil supplies had risen by 570,000 bd to 54.9 mbd “with North America providing around 40 percent of the growth”.

The agency also spotlighted a dilemma for the Organization of Petroleum Exporting Countries.

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