World oil demand growth revised downwards
Given the uncertainties surrounding the global economy, the forecast for world oil demand growth has been revised down from an initial 1.3mb/d to 0.9mb/d. The revision was amid higher OPEC production and rising non-OPEC supply, the slowing pace of oil demand growth provides further evidence that the oil market is well supplied.
OPEC stated that despite the measures being put in place by the European Central Bank (ECB) to the tune of €80bn and an exceptional support of more than €1trn to the ailing banking system via its Long Term Refinancing Operation Programme, the real economy of the Euro-area has continued declining and slid into recession again.
Non-OPEC oil supply is expected to increase by 0.6mb/d in 2012, an upward revision of 30tb/d from the previous month. The adjustment was supported mainly by healthy output in the first few months of the year from North America, The Former Soviet Union (FSU) and China. Anticipated growth continues to be driven by the US, Brazil, Russia, China and Columbia, partially offset by declines in Sudan, South Sudan, Syria, Norway, and the United Kingdom (UK).
OPEC Natural Gas Liquids (NGLs) and non-conventional oils are forecast to increase by 0.4mb/d in 2012 to average 5.7mb/d. According to preliminary data from secondary sources, total OPEC production in March averaged 31.31mb/d, an increase of 135tb/d from February. 90.00 100.00 110.00 120.00 130.00 One Year OPEC Oil Prices (Apr. 11 -Mar. 12)
signs of adequate supply, higher refined product prices in major consuming countries, along with the readiness of Western governments to release strategic crude reserves and the slowing pace of global economic growth, particularly in the Euro-zone, did not affect increase in crude oil price. The OPEC Reference Basket averaged US$121.59/b in Q1 2012, compared with US$101.28/b in Q1 2011. The maximum and minimum ORB price was US$124.59/b and US$109.40/b in Q1 2012, compared with US$112.03/b and US$89.79/b in Q1 2011.
The OPEC Reference Basket averaged US$121.59/b in Q1 2012, compared with US$101.28/b in Q1 2011.
Source: FSDH Research
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