OPEC estimates for 2014 global oil demand growth unchanged

The Organisation of Petroleum Exporting Countries (Opec) has kept estimates for global oil demand growth in 2014 unchanged, and said world oil consumption will increase by 1 million barrels per day, or 1.2 per cent, next year to about 90.8 million barrels per day.

Opec’s estimates came amid stable global growth expectations which it says now stand at 2.9 per cent for 2013 and 3.5 per cent for 2014.

OECD economies are forecast to rebound from low growth of 1.1 per cent in 2013 to 1.8 per cent in 2014.

Growth expectations for China now stand at 7.6 per cent in 2013 and 7.7 per cent in 2014, while India’s forecasts are unchanged at 5.6 per cent and 6.0 per cent, respectively.

Vienna-based Opec’s secretariat said in its monthly market report today that increasing output from countries outside OPEC means demand for the organisation’s crude will slide to 29.7 million barrels a day, or about 600,000 a day less than its 12 members pumped last month, the report showed.

Brent crude futures have gained about 2.8 per cent in the past three months, trading near $107 a barrel in London today, amid signs the slowdown in China’s expansion has stabilised, US unemployment retreating and the recession in European economies is easing.

Opec agreed to tighten compliance with its official production target of 30 million barrels per day at its last meeting in May. The group will next meet on December 4.

Opec’s latest Monthly Oil Market Report said the group production fell 97,000 barrels a day to 30.31 million last month amid declines in Libya and Iraq, citing an average of secondary sources for the estimates.

Output in the North African nation slumped 124,400 barrels a day to about 1.1 million while Iraq’s production slid by 50,900 a day to 2.97 million a day.

The Opec Reference Basket averaged $104.45/b in July, representing a gain of $3.42/b over the previous month.

The increase came mainly from Brent-related North African grades, as well as Middle Eastern crudes.

The report shows that the value of the Opec Reference Basket (ORB) rose in July for the second straight month to levels seen in the first quarter, with the highest month-on-month gain since February.

Expansion in the value of Brent-related North African crudes, as well as Middle Eastern crudes, lent strong support to the ORB over the month.

Market sentiments for Asia-destined crudes were healthy amid an uptick in demand due to improving margins, increasing refinery runs and tight supply.

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