The International Energy Agencys (IEA) monthly report for November saw its estimate for oil demand in Q4 2011 fall to 0.7mn bpd (down by 0.2mn bpd), but the watchdog left its forecast for 2012 unchanged at 1.3m bpd.
Global economic backdrop
However, it said the risks for consumption growth were on the downside due to the "worsening global economic backdrop" and the impact of persistently high oil prices.
The IEA made relatively small adjustments to both its global oil consumption and non-OPEC production growth forecasts for this year and 2012, leaving the balance of supply, demand and the need for OPEC production roughly unchanged from last month.
OPEC and IEA reports converge
IEA said that its own views about OPEC oil production for 2012 largely converged with the cartel's own estimates. "Both reports [OPEC and IEA] point towards an average underlying 'call on OPEC crude and stock change' that lies above 30mn bpd for 2012," said the report.
The IEA said that OPEC crude oil supply in November rose to the highest level in more than three years, up by 620k bpd to 30.68mn bpd last month with Saudi Arabia and Libya accounting for 80 per cent of the increase.
Strong recovery by Libya and Iraq
On Libya, the IEA said: "The recovery in Libyan output has exceeded expectations so far in 2011, with a faster than expected rebuilding of capacity seen for 2012. Overall, Libyan output is forecast to rise to prewar levels of around 1.6mn bpd by 2014."
Demand and supply fundamentals point a structural easing of the oil markets after 2012, the IEA said, picking out the strong recovery of output in Libya and Iraq alongside sharply higher figures for US shale oil developments.
In the medium term crude oil expansion plans are moving apace, with capacity now forecast to increase by 2.33mn bpd to 38.1mn bpd by 2016.
Iraq accounts for 80 per cent of the increased capacity. "Capacity growth is 200k bpd higher than our previous forecast for the 2010-16 period, with upward revisions to Iraq partially offset by delays to Iranian projects," highlighted the report.
