WASHINGTON: Global oil demand through next year will be weaker than previously forecast while petroleum supplies will be higher, the US government said in a revised outlook on Wednesday.
The latest forecast from the US Energy Information Administration could put downward pressure on oil prices, which have more than doubled since February on hopes for an economic recovery.
The EIA cut its forecast for world oil demand growth in 2010 by 30,000 barrels per day to daily demand of 84.58 million bpd. But it boosted its forecast of global oil production growth by 150,000 bpd to average output of 84.65 million bpd.
The EIA’s new monthly short-term energy forecast would mean a daily world oil supply surplus of 70,000 barrels.
The agency said while the current outlook assumes the world economy “begins to recover at the end of this year,” projected strong oil demand growth in developing countries will be partially offset by weaker oil use in industrialized nations, contributing to the supply surplus.
For the fourth quarter of 2009, the EIA lowered its forecast for OPEC crude oil production to 29.26 million bpd from its prior estimate of 29.31 million bpd.
“The combination of higher prices and OPEC’s historical tendency for weaker compliance with production targets over time ... suggests that OPEC crude oil production could (still) rise over the remainder of the year, unless prices fall sharply from current levels,” the EIA said.
The EIA raised its forecast of OPEC oil output during 2010 to an average 28.89 million bpd from 28.82 million bpd.
Separately, the EIA lowered its projection for oil output from non-OPEC countries next year to 50.19 million bpd from its previous projection of 50.22 million bpd. “Over the forecast period, higher output from Brazil, the United States, Azerbaijan, Kazakhstan and Canada offsets falling production in Mexico and the North Sea,” EIA said.
US oil output is forecast to average 5.24 million bpd this year and then rise to 5.30 million bpd in 2010. “Crude oil production from the new Thunder Horse, Tahiti, Shenzi and Atlantis federal offshore fields accounts for about 14 percent of Lower-48 crude oil production in the fourth quarter of 2010,” the agency said.
US petroleum demand next year will still be higher than in 2009, but the EIA cut the overall increase in fuel use next year by 20,000 bpd.
“The modest economic recovery projected for 2010 contributes to a 260,000 bpd (1.4 percent) increase in total liquid fuels consumption,” the agency said.
