The Paris based International Energy Agency lowered its global oil demand forecast by 60,000 barrels per day for 2011 citing lower than expected figures during the second and third quarters of the year, sustained pressure of high oil prices and increased evidence of economic slowdown.
The IEA said that overall, global oil demand is expected to average 89.5 million bpd in 2011, 1.4% higher YoY. The IEA advises 28 industrialized nations on energy policy. Concerns over debt levels in Europe and the US, and signs of slowing economic growth in China and India have spooked the market and raised fears in some quarters of a double dip recession. From an oil market standpoint, perceived wisdom is that this must inevitably mean weaker oil demand to come.
It said that with extra crude volumes now hitting the market after the Organization of Petroleum Exporting Countries boosted supply and the IEA released emergency stocks this has been sufficient to sharply weaken prices. However, the IEA raised its global oil demand forecast for 2012 by 70,000 barrel per day to 91.1 million barrel per day. A lower GDP case would cut 1.3 million bpd from 2012 demand.
Mr Kate Dourian Middle East editor for global energy information provider Platts said that “The market appears to be well balanced at the moment. Oil prices haven’t fallen below their support levels. Demand from Asia continues to be relatively robust. It doesn’t seem like a 2008 situation when the financial system collapsed. Marker crude prices have lost USD 12 per Darrel to USD 15 per barrel since early August amid growing concerns over government debt and the likely impact on the global economy.”
( Source: www.steelguru.com )