The International Energy Agency (IEA) and OPEC have cut growth estimates for oil demand in 2011 and 2012 as global economic conditions worsen.
Forecasts
The IEA reduced its global economic growth estimates for 2011 to 3.8 per cent from the 3.9 per cent given in its September monthly report. The IEA also cuts its 2012 world demand estimate by 210,000 bpd, to 90.5mn a day in its latest monthly oil market report.
OPEC also cut its world demand forecasts for 2011 and 2012 for the third time in a row. OPEC cut its 2011 estimates by 50,000 bpd to 89.2 million bpd, which is an increase of 1 mbpd over 2010. OPEC's 2012 estimate was lowered 210,000 bpd to 90.5 mbpd, up 1.3 mbpd.
Economic downturn
"Economic prospects remain fragile, particularly with the euro zone's ongoing sovereign debt crisis," the IEA said.
"Global oil demand has grown at a moderate, but stable pace in recent months. The picture could deteriorate, however, with a downward lurch in economic prospects."
The OPEC echoed this sentiment stating in its monthly report: "The economic downturn is taking its toll on world oil demand, especially in the OECD (group of developed countries)."
Could deteriorate
According to the IEA, OPEC will need to provide an average of 30.8mn barrels a day in the fourth quarter. That's about 300,000 a day more than the agency estimated in its September's report. OPEC pumped 30.15mn a day in September.
