The International Energy Agency increased its world oil-demand forecast for this quarter and next year amid signs of a rebound in Chinese demand.
Global consumption in the final three months of 2012 will average 90.5 million barrels a day, about 435,000 barrels, or 0.5 percent, more than previously forecast, the Paris-based agency said in a monthly report today. Demand will expand by 865,000 barrels a day in 2013 to 90.5 million, the IEA said, adding 110,000 barrels to its previous forecast.
The Organization of Petroleum Exporting Countries, which meets in Vienna today to decide production quotas, will need to supply 30.4 million barrels a day this quarter, 400,000 barrels more than in the IEA’s previous projection, because of the increased demand outlook. The so-called call on OPEC crude was left unchanged for next year at 29.9 million barrels daily.
“Markets have grown somewhat more optimistic about the Chinese economy as confidence indicators recently turned expansionary after a long period in the doldrums,” the IEA said in the report. “This trend seems consistent with signs of a return to more robust Chinese oil demand growth in the last two months, following uncharacteristically sluggish expansion earlier this year.”
China will consume 9.9 million barrels a day in the fourth quarter, 115,000 barrels more than projected in last month’s report, according to the IEA. Consumption is estimated to rise to 9.8 million barrels a day in 2013.
The country’s economy may grow 7.9 percent in the three months ending December from a year earlier, snapping a seven-quarter slowdown, according to the median estimate in a Bloomberg survey of 29 economists conducted Nov. 14 to Nov. 19. China’s net-crude imports in November rose to the highest level in six months as the world’s second-biggest oil user refined more than 10 million barrels a day for the first time.
Global oil supply rose by 730,000 barrels a day last month to 91.6 million barrels daily on higher supply from the Americas and the North Sea, the IEA said. The adviser to 28 industrialized nations raised its 2013 forecast for non-OPEC supplies by 70,000 barrels a day to 54.2 million barrels daily. That represents annual growth of 890,000 barrels a day, the most since 2010.
OPEC supply rose 75,000 barrels a day in November, according to the IEA. The 12 member nations supplied 31.22 million barrels daily, which is 4.1 percent more than the supply limit of 30 million agreed at their last conference in June. In its own report yesterday, the group said its output slid to an 11-month low of 30.78 million barrels a day last month, citing secondary sources.
While OPEC’s own forecasts show that it’s pumping more than consumers need, Saudi Arabia, Iraq, Iran, the United Arab Emirates, Angola and Ecuador have indicated that supply and demand are approximately in balance, suggesting that the group will stick to its official output target of 30 million barrels a day. Brent crude is heading for its highest-ever annual price, averaging $111.78 a barrel so far this year in London.