PARIS/VIENNA – The International Energy Agency (IEA) cut its world oil demand forecast for 2013 Tuesday on continuing fragility in the world economy despite signs of recovery in China and the United States. The IEA said the marginal cut of 85,000 barrels a day was in line with the prospect for slower economic growth forecast by the International Monetary Fund, which last month cut its world growth estimate for 2013 to 3.5 per cent from 3.6 per cent. The agency now forecasts oil demand of 90.7 million barrels per day, with the eurozone and Latin America accounting for much of the revisions. "The reduction in the IMF economic outlook for Europe seems particularly ominous," the agency said in its monthly report on the world oil market, in part because of "the sheer size of the region's economic footprint". Oil demand across Europe is now forecast to decline 260,00 bpd, or down 1.9 percent, instead of 235,000 bpd lower as forecast earlier. The IEA said world oil supply hit 12-month lows in January, down 100,000 bpd on a monthly basis to 30.34 mbd, despite higher production from Saudi Arabia and Kuwait. Crude oil production in the US averaged more than seven million barrels per day in January, the highest level since November 1992, the International Energy Agency said in its monthly report Wednesday. According to preliminary estimates, production was up by 910,000 barrels per day compared to January 2012, thanks to the development of non-conventional hydrocarbon sources including shale and tight oil reservoirs. Total US oil output increased by almost one million barrels a day in 2012, to 9.1 million barrels, according to the report. Still, the report said lower drilling levels for natural gas will result in decreased volumes of natural gas liquid (NGL). "Though NGL production growth is expected to be muted in 2013, crude production is expected to grow by" 610,000 barrels per day, the report said, bringing total oil output to 9.8 million barrels per day this year. In Vienna, however, OPEC said Tuesday that world oil demand will grow faster than previously thought in 2013, citing signs of a recovery in the world economy. Consumption of oil will expand by 840,000 (bpd) barrels per day this year, the Organization of the Petroleum Exporting Countries said in its monthly report, 80,000 bpd more than previously expected. According to secondary sources cited by the report, OPEC trimmed its output further in January by about 21,000 bpd to 30.32 million bpd, closer to its official target of 30 million bpd. Saudi Arabia told OPEC it pumped 9.05 million bpd in January, steady from 9.025 million bpd in December, confirming figures given last week by an industry source. Meanwhile, the US Energy Information Administration said Tuesday world oil demand will grow faster than previously expected in 2013, and rapid increases in the North American supply may not be enough to keep gasoline prices in check as spring approaches. The EIA, the independent statistical arm of the Department of Energy, increased its forecast for demand growth by 110,000 bpd to 1.05 million bpd in 2013, taking global demand to 90.2 million bpd this year as the world economy recovers. While that increase will be overshadowed by a 1.2 million bpd increase in supplies from countries outside the Organization of the Petroleum Exporting Countries (OPEC), led by growth in North America, the EIA said average US gasoline prices would still rise in the coming months. "While EIA expects crude oil prices to come off their current high levels, pump prices will continue to rise over the next few months to peak at $3.73 per gallon in May 2013," said EIA Administrator Adam Sieminksi, citing higher demand and the switch to more expensive summer fuels. World oil prices dipped in subdued trading on Wednesday and after the United States reported a rise in its crude stockpiles. Brent North Sea crude for delivery in March eased 11 cents to $118.55 a barrel in late London deals. New York's main contract, light sweet crude for March, eased four cents to $97.47 a barrel. — SG/Agencies
