by Staff Writers
Paris (AFP) Jan 18, 2012
The IEA Wednesday cut its global oil demand growth forecast for 2012, with the market dragged down by a weakening world economy and stubbornly high prices while the nuclear crisis with Iran deepens.
The International Energy Agency in its January monthly report cut its outlook for 2012 demand growth to 1.1 million barrels per day from 1.3 mbpd, citing the impact of a fall in demand in the fourth quarter of 2011 of 300,000 bpd.
According to the IEA, the market will be divided between declining appetite for oil in richer OECD countries, especially in Europe, and continued growing demand in developing countries, especially Asia.
"Against a backdrop of weakening economic performance, regional oil demand looks particularly sluggish in Europe," the IEA said, noting that European consumption fell by 4.6 percent in November on a year-on-year basis
European demand in 2012 is forecast to fall by 200,000 bpd or 1.4 percent, less severe than 2011s 1.9 percent correction as Europe, the agency said.
The IEA said non-OECD countries "will continue to dominate growth looking forward", with 1.4 mbpd of additional demand, a 3.2-percent gain for 2012.
"This is 130,000 bpd less than assumed in last month's report, following a modest downward adjustment for growth prospects in China," it added.
The current standoff with Iran, faced with the prospect of an European Union oil embargo on fears Tehran is aiming to acquire nuclear weapons, has also "further dampened prospects" for demand, along with a mild winter in the northern hemisphere, the IEA said.
The IEA said oil prices, however, remained stable as "a rising likelihood of sharp economic slowdown" was offset by supply concerns linked at least in part to the Iranian crisis.
The agency noted that while price stability "is often seen as a good thing" if it derives from potential economic slump on the one hand and possible geopolitical turmoil on the other, "that is scarcely a source of comfort".
In December, non-OPEC supply fell by 140,000 bpd to 53.2 mbpd due to Middle East unrest and other unplanned outages, the IEA said.
A rebound to 340,000 bpd growth is expected for the first quarter of 2012 and 1.0 mbpd for 2012 overall.
OPEC oil output in December rose by 240,000 bpd to 30.89 mbpd, the highest in more than three years, on a rapid recovery in supplies from Libya and lesser increases from Saudi Arabia and the UAE, the IEA said.
Last month, OPEC increased its official 2012 output target to 30 mbpd in the cartel's first new output agreement in three years and the first to include Iraq in the groups target system in more than two decades.
The IEA warned that in 2012 that geopolitical risks have shifted to Nigeria, Iraq and "most pressingly, Iran."
Because of the Iranian nuclear crisis, at least a portion of Tehran's 2.5 mbpd of oil exports could be denied to OECD refiners in second half 2012, although more "apocalyptic scenarios for sustained disruption to Strait of Hormuz transits look less likely," the IEA said.
The EU, following in Washington's footsteps, has agreed in principle to impose a ban on Iranian oil imports but details to timing and implementation remain sketchy.
The IEA estimated that around one-third of Iran's oil exports were destined for Europe destinations between January and October 2011, mostly to Italy, Spain, Greece and Turkey.
The rest headed mainly eastward to China, India, Japan and South Korea.
All told, eastbound exports accounted for 65 percent of total Iranian exports, the IEA said.
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Bulgarian parliament bans shale gas exploration
Sofia (AFP) Jan 18, 2012
Bulgarian lawmakers slapped on Wednesday a ban on shale gas exploration and production, bowing to strong public pressure over environmental concerns. In a special resolution, the parliament "banned the use of the method of hydraulic fracturing for natural gas and oil exploration on Bulgarian territory and its Black Sea waters." It also specifically banned "shale gas exploration using th ... read more
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