OPEC forecast lower demand for its crude next year as global economic growth slows and predicted markets will be “comfortable” because of increased supply from outside the group.
The Organization of Petroleum Exporting Countries, in its first assessment for 2013, estimated its 12 members will need to provide an average of 29.6 million barrels a day, or 300,000 less than the amount required this year. That’s about 1.8 million a day below current production rates for the group, which accounts for about 40 percent of global supplies.
“In the coming year, the world economy is likely to face continuing challenges from Europe’s sovereign debt burden and its weak banking system,” OPEC’s Vienna-based secretariat said today in its monthly report. “The deceleration in the emerging economies and the recent easing in the U.S. recovery, due to persistently high unemployment, are also expected to dampen growth to some degree.”
Brent crude futures have fallen 23 from this year’s peak as Europe’s debt turmoil intensified, trading near $99 a barrel today in London. OPEC’s projection of lower demand next year may encourage members to fulfil the pledge made at their last meeting in June to comply better with output limits. Iran, whose output fell below Iraq’s last month, rescinded its calls for an emergency meeting this week as crude prices stabilized.
OPEC output slipped by 105,900 barrels a day last month to 31.36 million a day as production slump in Iran, according to secondary sources cited by the report. A European Union embargo against the Islamic Republic took effect on July 1. That still leaves total OPEC supply 1.36 million barrels higher than the ceiling members agreed to respect at their June 14 gathering.
The group agreed at the meeting to comply more closely with its existing output target of 30 million barrels a day.
Global oil demand will increase by 800,000 barrels a day to average 89.5 million a day in 2013, as rising consumption in emerging economies offsets a contraction among the most industrialized nations. The world economy will expand by 3.2 percent in 2013, down from 3.3 percent this year, according to OPEC. Consumption this year will rise by 900,000 barrels a day, or 1 percent, little changed from last month’s estimates.
Supply growth outside the organization will take care of the increase in global demand, OPEC estimates. Non-OPEC producers, such as Canada, Russia and Brazil, will increase by 900,000 barrels a day to average 54 million in 2013. That represents a stronger level of growth than this year’s 700,000 barrel-a-day increase.
Oil inventories among developed nations are “high,” and rising in emerging economies, giving an “additional cushion to the market,” according to OPEC.
The group’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The organization is next scheduled to meet on Dec. 12 in Vienna.
The International Energy Agency, an adviser to consuming nations, will release its monthly report on global oil supply and demand tomorrow.