Business | Oil & Gas
Opec lowers 2009 demand forecast
The Organisation of Petroleum Exporting Countries (Opec), the supplier of more than 40 per cent of the world's oil, lowered its forecast for 2009 oil demand as the global economic slowdown cuts fuel consumption.
- Bloomberg
- Published: 20:54 September 16, 2008
London: The Organisation of Petroleum Exporting Countries (Opec), the supplier of more than 40 per cent of the world's oil, lowered its forecast for 2009 oil demand as the global economic slowdown cuts fuel consumption.
The 13-member group reduced its forecast for average oil consumption next year to 87.66 million barrels a day, compared with an estimate last month of 87.80 million barrels, according to a monthly oil market report yesterday. Opec, based in Vienna, also cut its forecast for demand this year by 120,000 barrels a day.
Opec told its members on September 10 to strictly comply with production quotas after oil prices fell about 30 per cent from a record. Prices have continued to tumble and New York crude is now trading 38 per cent lower than its July 11 peak of $147.27.
"The economic slowdown is now spreading beyond the US to Europe and Japan with contagion risks to other regions," the report said. "The weakening economic situation has been reflected in a slowdown in world oil demand growth."
IEA report
Last week, the International Energy Agency, an adviser to 27 nations, cut its forecast for global oil demand in 2008 and 2009 as high crude prices and the economic slowdown reduce US consumption.
Opec left its demand growth forecast for 2009 little changed at 870,000 barrels a day, or one per cent, with higher consumption from developing countries expected to account for all of the increase, it said.
The call on Opec's crude next year will average 31.33 million barrels a day, unchanged from its previous estimate as non-Opec supply rises in line with demand. In 2008, demand for Opec crude is forecast at 32 million barrels a day, 50,000 barrels lower than last month.
At a meeting in Vienna last week, the group urged its members to trim production back to target levels in response to falling demand and tumbling prices. The group has recently been pumping about 500,000 barrels a day more than quota limits, according to its secretary-general, Abdullah Al Badri.
Total Opec crude production averaged 32.50 million barrels a day in August, a drop of 21,300 barrels a day from July, the report said, citing secondary source estimates that include analysts and news agencies.
Crude production by the so-called Opec 11, which excludes Indonesia and Iraq, averaged 29.265 million barrels a day last month. Those 11 countries have an official quota of 28.8 million barrels.
Winter supply
Taking into account its pledge to stick to quotas, oil supply from its members will be "more than adequate to meet demand ahead of the winter season," Opec said in yesterday's report.
Most of Opec's extra production has come from Saudi Arabia, the world's largest oil producer, which pledged to raise output by about 500,000 barrels a day in June and July, to calm markets. Saudi output fell by 36,200 barrels a day in August to 9.49 million barrels a day, according to the report.
Opec forecast supply from outside the 13-member group to rise by 880,000 barrels a day in 2009 to 50.81 million barrels a day. Last month it forecast 2009 non-Opec supply to be 50.95 million barrels a day.
Opec's 13 members are Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE and Venezuela. Indonesia will leave the group on January 1.
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