OPEC Slashes Global Oil Demand Estimates Regarding Gloomy Global Outlook

Researched by Industrial Info Resources (Sugar Land, Texas)--Global oil demand is looking weaker than previously forecast as the slowing economy continues to weigh on consumption, according to monthly report released by the Organization of the Petroleum Exporting Countries (OPEC) (Vienna, Austria). The 12-member oil cartel trimmed its forecast for growth in world oil demand in 2013 by 30,000 barrels per day to 780,000 barrels.

The oil cartel maintained oil supplies are adequate and pointed out this year's demand forecast has often been cut, while saying the supply from producers outside the 12-member group has performed well. "The projections for global oil consumption continue to be affected by the uncertainties facing the world economy," OPEC said. "The combination of an austerity-driven Euro zone, the weakening recovery in Japan, and clear signs of a slowdown in major emerging economies have been the main factors behind this development."

For the U.S. market, OPEC said the economy there was "below potential," with deceleration forecast for next year. While China's economy is expected to expand 8% next year, Japan's economy is expected to contract a full percentage point to 1.1% growth in 2013, when compared with this year.

"Despite the prevailing weakness in the world economy, the slowing momentum is expected to bottom out later this year," the OPEC report stated. Oil prices have this year soared to well above the $100 per barrel level that many governments consider a drag on economic growth.

Oil inventories held by companies in the most industrialized nations were 46 million barrels below their five-year average in August, after dropping "sharply" to 2.67 billion barrels, according to the OPEC monthly oil report. In the U.S., the world's largest consumer of crude, stockpiles were 28.6 million barrels higher than their five-year mean at 364.7 million.

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