OPEC, in its monthly report, said it was still expecting an expansion of 840,000 barrels per day, bpd, in global oil consumption this year. But it warned that demand growth could miss forecasts due to economic weakness and US supply would hit its highest in three decades.
OPEC, the source of more than a third of the world’s oil, expects the US economy to expand by 1.7% in 2013, down from the 1.8% previously thought. Growth in the euro zone is now seen contracting by 0.2%, having earlier been expected to expand slightly.
A similar monthly report by the US Energy Information Administration, EIA, cut its 2013 world oil demand forecast slightly, but also cut the forecast for non-OPEC output.
Uncertainty over Europe’s economic outlook, worries about central banks pulling the plug on easy monetary policy and concerns of an uneven recovery in China have shaved more than $10 a barrel off Brent since the high of more than $119 touched by the contract in February.
But positive data out of the United States, assurances by the US Federal Reserve of continuing with its easy policy and lingering worries of supply disruption from the Middle East may help push prices higher.
“The two reports have focused a lot on Europe and are worried about the negative impact it may have on oil,” said said Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo. “But if you look at supply disruption worries, equity markets, oil should remain supported.”