IEA downgrades 2013 oil demand growth outlook

Middle East Online PARIS: The
International Energy Agency forecast Thursday that global demand for oil would
grow by 795,000 barrels per day to a total of 90.6 million barrels (mb/d), an
estimate that was just slightly lower than its previous outlook, as a decline in
Europe partially offset growth elsewhere.

But the IEA cautioned in a
monthly report that falling oil prices did not necessarily foreshadow a "bear
market" and added: "There are signs that some of the recent easing of upward
price pressures could be relatively short lived."

From a peak in early
February of $118.90 dollars a barrel for Brent North Sea crude oil, the European
reference, the price of oil fell to $104.00 early this month and stood on
Thursday at $105.57 in Asian trading.

To back up its caution on oil
prices, the agency pointed in particular to disruptions to crude oil supplies in
countries such as Iraq, Libya and Nigeria, and to geopolitical threats in Iran,
North Korea and Syria.

It was the third month running that the IEA
revised its 2013 demand estimate lower however, from a forecast in January of
90.8 mb/d.

The latest report noted that demand "remains
subdued."

"It has been exceptionally weak in the OECD, notably in Europe,
where consumption in 2013 is expected to be the lowest since the 1980s," it
added in reference to members of the Organisation for Economic Cooperation and
Development, the world's most industrialised economies.

"While growth
elsewhere is more robust, global demand came in below expectations in the first
quarter of 2013 and our forecast for 2013 has been marginally trimmed" as a
result, the IEA said.

On the supply side, crude oil from OPEC countries
fell by 140,000 barrels per day in March to a total of 30.44 mb/d, while oil
stocks held by OECD members declined to a total of 2.664 billion barrels at the
end of February.

On Wednesday, the Organisation of Petroleum Exporting
Countries kept its world oil demand forecast for 2013 virtually unchanged, with
China expected to contribute the most to growth.

OPEC expects world
demand to reach 89.66 mb/d, with slow growth at the beginning of the year
picking up in the second half.

According to the IEA, demand for oil
products in China, the world's second biggest oil consumer, is forecast to grow
by 3.9 percent this year to a total of 9.976 mb/d.

In the United States,
demand was expected to dip by a very slight 0.1 percent to 18.58
mb/d.