The International Energy Agency (IEA) has trimmed its outlook for global oil demand due to weaker than expected economic growth. Moreover, conventional oil producers will be squeezed by higher shale oil output.
Growth in global oil demand this year was expected to remain largely unchanged from last year at around 895,000 barrels per day (bp), which was 30,000 bp less than in 2012, the International Energy Agency (IEA) said Friday.
In its Oil Market Report for August, the agency, however, trimmed its 2014 growth forecast for oil demand by 100,000 bp down to 1.1 million bp.
The slowdown was the result of a revised figure for global economic growth next year, the IEA said, which the International Monetary Fund (IMF) had forecast to come in at 3.8 percent rather than an original 4 percent.
As far as global oil supply was concerned, production in July had increased by 575,000 bp to 91.8 million bp compared with the previous month, IEA said, The rise was led primarily by higher oil production outside of the Organization of Petroleum Exporting Countries (OPEC).
Strong growth by producers especially in North America was expected to lift non-OPEC supply in the second half of the year by 1.4 million barrels per day to 55.4 million barrels.
In its monthly report, IEA highlighted the troubles this is creating for OPEC. In the longer term the boom in production of shale oil and gas in North America would have a vast structural effect on oil markets, the agency said.
For the short term, however, production by the oil market cartel was primarily undermined by political unrest and violence, it added.
In November 2012, IEA said it expected the United States to become the biggest oil producer by 2017, ahead of Saudi Arabia.
uhe/hc (AFP, Reuters)