Saudi Arabia Bullish on Oil Demand as IEA Revises OutlookWael Mahdi
Saudi Arabia’s petroleum ministry foresees a bigger improvement in oil demand this year than the world’s three best-known forecasting agencies, including OPEC.
Saudi Arabia, OPEC’s largest producer, expects world demand to rise about 1 million barrels a day this year, and exceed 90 million barrels a day “for the first time in history,” Ibrahim al-Muhanna, an adviser to Saudi Oil Minister Ali al-Naimi, said yesterday in Kuwait.
The International Energy Agency today trimmed its global oil demand growth estimate for 2013 amid subdued economic growth, following similar moves by the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries.
China leads Asian nations where demand is rising, al-Mohanna said. Oil producers such as Iraq, Iran, and Libya will be among other countries where demand will grow this year, he said. Other emerging markets such as Russian and Latin American countries will also contribute to rise in demand, he said.
World oil use will rise by 795,000 barrels per day this year, the Paris-based IEA said in its monthly oil report, 45,000 barrels a day less than it estimated last month and a third straight reduction. OPEC said in its monthly report yesterday it lowered its consumption growth forecast to 800,000 barrels a day, while the EIA, part of the U.S. Energy Department, on April 9 lowered its estimate to 960,000 barrels a day.
Forecasts from these international agencies, including OPEC, “do not reflect the official position of Saudi Arabia and its outlook of the market future,” al-Muhanna said.
Demand within OPEC itself, and in China, Japan and India, underpins forecasts for higher consumption, Kamel al-Harami, a Kuwait-based independent oil analyst said. “The Saudis have their hands on the pulse of the global economy. They sometimes see things that organizations don’t see.”
Next year will be “important for the oil market and for the global economy as a whole,” al-Muhanna said yesterday, while attending a meeting of the Organization of Arab Petroleum Exporting Countries. Europe will probably have recovered from its financial crisis, enabling demand to recover “albeit in a limited way,” he said.
Saudi Arabia expects the world economy to expand by 3 percent next year, resulting in a gain in oil demand of as much as 1.2 million barrels a day, he said.