OPEC raises 2012 forecast, warns of uncertainty

The OPEC oil cartel yesterday raised its 2012 forecast for growth in global oil demand, but warned of “a great amount of uncertainty” amid economic instability, especially in the eurozone.
“Oil demand will grow in 2012, but not without a great amount of uncertainty,” the Organisation of Petroleum Exporting Countries said in its monthly report.
Demand for 2012 was forecast at 88.9 million barrels per day (bpd), up slightly from a previous estimate of 88.87 million bpd.
For 2011, OPEC also hiked its demand forecast to 87.84 million bpd from the 87.80 million bpd predicted in December.
This would represent year-on-year growth of about 1.1 million bpd, compared with 0.9 million bpd the previous year, the report noted.
The ongoing eurozone debt crisis remained the biggest threat to the global economy and, as a result, to the oil market, the report said.
“So far it has had little impact on market fundamentals in other regions. However, if the situation were to worsen, the effect on the oil market could be seen not only through a further decline in oil demand in Europe but also with spillover effects on oil demand in the emerging economies,” OPEC warned.
The eurozone’s troubles, which have undermined car sales on the continent, were also “likely to add to oil price volatility,” it said.
The economic situation and high taxes have seen oil consumption in Europe, especially in Britain, France, Germany and Italy, shrink in 2011 and this was set to continue this year, OPEC added.
Generally, oil demand in the OECD region of developed countries was expected to fall in 2012 from the level seen last year.
While this would be counter-balanced by a rise in demand in non-OECD nations – of about 1.0 million bpd – that demand would grow “at a slower pace than last year,” owing to slower economic growth, OPEC said.