London: World oil demand growth will accelerate next year, adding to the pressure on available supplies, the International Energy Agency (IEA) said on Wednesday, contradicting a more conservative outlook from producer club Opec.
In its first 2012 forecast in a monthly report, the IEA, adviser to 28 industrialized countries on energy policy, said oil use would grow by 1.47 million barrels per day (bpd) to a hefty 91 million bpd, compared with 2011 demand growth of 1.2 million bpd.
Its growth prediction for next year was slightly lower than a forecast from the United States’ Energy Information Administration but more than the 1.32 million bpd expected by the Organization of the Petroleum Exporting Countries (Opec).
Differences between the group and consumer countries widened after the 12 members of Opec in June failed to reach a deal on a Saudi-led proposal to increase output.
In response, the IEA, led by the United States, surprised markets with a release of oil from emergency stocks held by its 28 member countries.
Brent crude was trading above $117 a barrel on Wednesday, higher than it was before the IEA emergency reserves release, and Opec’s monthly report on Tuesday said the use of stocks had little impact.
But the IEA on Wednesday said it had added supply of high-quality crude to a tight market and the agency took “a resolutely positive view” of the strategy so far.
“The point of the stock release was to add some liquidity and flexibility into the market. I think we’ve done that,” David Fyfe, head of the IEA’s oil industry and markets division, told Reuters Insider.
He said the agency had yet to decide on whether it would release more supplies and reiterated earlier comment it would make a decision 30 days after the initial announcement on 23 June.
Limited Opec Capacity
The IEA report said Opec’s oil production capacity would struggle until output from Opec member Libya began to recover from the impact of civil war.
It did not expect that to happen until the end of 2012 and said Opec capacity would fall to a low point of around 33.8 million bpd in the first quarter of next year.
Opec output rose significantly in June following a unilateral supply increase from the group’s leading exporter, Saudi Arabia. According to the IEA, Saudi Arabia pumped 9.7 million bpd in June, just shy of the 9.8 million bpd cited by a senior Gulf Opec delegate on Tuesday.
Overall, Opec production in June increased by nearly 850,000 bpd compared with May, the IEA said, but it still took the view that Opec oil output would remain well short of expected demand.
It said demand for Opec crude would average almost 31 million bpd in the second half of this year, around 1 million bpd more than Opec produced in June.
The IEA also said Saudi Arabia’s crude exports could be eroded by domestic requirements for oil for power generation, which could hit record levels this year.