IEA: 2013 Oil Demand Growth Higher On Muted Recovery
LONDON - Global oil demand is expected to rise by 1 million barrels a day next year, faster than growth this year, but "well below" the levels seen before the financial crisis as economic recovery remains muted, the International Energy Agency said Thursday.
The IEA also said that demand from emerging economies will for the first time next year overtake demand in the world's most industrialized nations, or the OECD. This trend is unlikely to be reversed as non-OECD countries, mainly in Asia, will continue to lead oil demand growth next year, the agency said in its closely-watched monthly report.
That growth in emerging markets is driven by growth in population and income, as well as subsidized energy prices, said David Fyfe, the head of the IEA's oil markets division.
"Demand in the OECD is in structural decline and we're not expecting that to change," he said, adding that the IEA's forecasts do take into account recent weaker economic activity in the Asia-Pacific region.
According to the report, which contains the IEA's first forecasts for 2013, global oil demand will be 1.1% higher than 2012, averaging 90.9 million barrels a day.
The forecasts are more bullish than reports earlier this week from the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries, both of whom projected slower global oil demand growth in 2013 of 730,000 barrels a day and 800,000 barrels a day respectively.
The Paris-based agency, that advises industrialized countries on energy policy, made only a slight downward revision to its forecast for global oil demand in 2012 as the weaker economic backdrop was mostly offset by an upwards adjustment to its base data.
Oil prices have been volatile in the past few weeks as fears that sanctions against Iran could disrupt supplies have clashed with concerns about weaker oil demand due to economic problems caused by the euro zone debt crisis.
The report said that while those economic risks may place a ceiling on oil prices, the latent potential of demand growth in emerging countries and the ongoing risk of supply surprises could keep prices stubbornly high.
"This arguably represents as much of a policy challenge as does the perceived bogeyman of price volatility," the report said.
The IEA said that in June, output from OPEC fell 140,000 barrels a day to 31.8 million barrels a day as near-record output from Saudi Arabia helped to offset production declines from Angola and Iran.
Saudi Arabia pumped 10.15 million barrels a day in June, the IEA said. Iranian oil output fell 100,000 barrels a day in June, compared with May, to 3.2 million barrels a day. This took the Islamic Republic's oil production almost to 22-year lows, due to U.S. and European Union sanctions aimed at pressuring Iran over its nuclear program.
The IEA forecast the need for OPEC oil in the second half of this year at 31 million barrels a day, compared with 29.9 million barrels a day in the first half.
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