OPEC to cut oil demand growth forecast for 2013

Citing a vague and turbulent outlook for the global economy, OPEC has said that it may have to reduce its forecast for growth in world oil demand for 2013 by 20%. OPEC forecast that demand will expand by 810,000 barrels per day (bpd) next year, although the odds suggest oil use could undershoot that figure.

OPEC expects world economic growth to slow to 3.2% next year from 3.3% in 2012, hindered by a slightly slower expansion in the United States and China, the world's two largest oil consumers, and weakness in the euro zone.

OPEC trimmed the forecast of demand for its own oil this year and in 2013 by 80,000 bpd and 100,000 bpd, respectively, due to higher supply from producers outside the 12-member group. The United States, Canada and South Sudan are among the non-OPEC producers expected to provide more oil than previously expected this year. South Sudan said this week it hoped to resume production in September after ending a dispute with Sudan. OPEC now expects demand for its crude to average 29.9 million bpd in 2012 – significantly less than it is pumping at present even after a drop in output last month due to sanctions on Iran and a cutback by Saudi Arabia.

OPEC's demand outlook is, as usual, more cautious than that of the U.S. government which raised its forecast for 2013 growth in oil consumption.