World Oil Demand

[CSTEP]

The Organization of Petroleum Exporting Countries forecast world oil demand will grow at a slower pace for a second year in 2012 as consumption declines in Europe and slows in other industrialized nations.

Global demand will average 89.5 million barrels a day in 2012, the group’s Vienna-based secretariat said today in its monthly report, giving its first forecast for next year. That’s up 1.3 million barrels, or 1.5 percent, on this year’s estimate.

Crude oil consumption has been rising since the last quarter of 2009, driven by demand in emerging markets including China, according to OPEC. Chinese demand will rise by 500,000 barrels a day next year compared with a gain of 150,000 barrels a day in North America. European use will decline, it said.

“An unsteady world economy is negatively affecting the oil market and imposing a high range of uncertainty for the short term,” the organization said in the report.

OPEC members including Saudi Arabia, Iran and Venezuela will need to pump more crude to meet rising consumption. Demand for OPEC oil will climb to 30.3 million barrels a day in 2012, an increase of 300,000 barrels on this year, the report showed.

The producer group, which accounts for about 40 percent of global supply, expects crude use of 88.1 million barrels a day this year, up by 1.4 million barrels on last year.

OPEC’s output rose to 29.6 million barrels a day last month, the report said. The 11 members bound by quotas produced 26.9 million barrels, the most since 2008. In December of that year, the group announced record supply cuts amid a collapse in global demand. It capped supplies for all members except Iraq at 24.845 million barrels a day at that meeting.

‘Worst Meeting’

The organization last met in Vienna in June, when its members failed to agree on crude output limits for the first time in at least 20 years. “It was one of the worst meetings we’ve ever had,” Saudi Oil Minister Ali al-Naimi said.

Saudi Arabia together with Kuwait, Qatar and the United Arab Emirates proposed increasing production quotas at the meeting. They were blocked by members including Iran and Venezuela, which warned of a “collapse” in prices.

Non-OPEC supply will rise by about 680,000 barrels a day to average 53.57 million barrels next year, OPEC said. Shipments from countries including Russia, Norway and the U.K. are estimated at 52.89 million barrels a day this year. Production growth in North America, Latin America and the former Soviet Union will offset declines in Europe, OPEC said.

OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

http://www.bloomberg.com/news/2011-07-12/world-oil-demand-will-increase-at-slower-pace-in-2012-opec-says.html