OPEC predicts slowing in demand for oil

The Organisation of the Petroleum Exporting Countries (OPEC), which produces a third of global oil, said healthy output levels from non-OPEC producers next year would be enough to cover the modest growth in demand without the need for OPEC itself to increase output.

“Besides the eurozone crisis, geopolitical tensions in the Middle East, the contraction of manufacturing in the US for the first time since 2010 and decelerating economic growth in emerging markets have been fuelling uncertainties regarding global economic growth,” OPEC said in a monthly report.

OPEC left its 2012 world oil demand growth forecast unchanged at 0.9 million bpd and said growth in 2013 would slow to 0.82 million bpd.

“The fact the departure of Greece from the eurozone, with a severe impact on the eurozone economy, still cannot be ruled out remains a cause of concern,” it said.

“Such an action would provoke a massive capital outflow from the country and result in a default of its fiscal obligations, with a destabilising effect on the eurozone and beyond.”

The group’s forecasts are close to those of the US government, which on Tuesday cut its global oil demand growth estimate for 2013 by 360,000 bpd to 730,000 bpd.

OPEC forecast non-OPEC supply to increase by 0.7 million bpd in 2012 and 0.9 million in 2013.

“US oil supply is expected to average 10.07 million bpd in 2013, an increase of 0.37 million bpd over 2012. This increase will be the highest among all non-OPEC countries and at the highest annual level since 1986”, OPEC said.

Demand for OPEC’s own crude is expected to average 29.6 million bpd in 2013, almost two million below its June production levels of 31.36 million.

OPEC also cited sources as saying Iranian production was down to 2.963 million bpd in June, the lowest in more than 20 decades.