Weak demand growth to put oil prices under downward pressure in 2013
Azerbaijan, Baku, Nov. 26 / Trend A.Badalova /
Rising non-OPEC supply and weak demand growth will exert downward pressure on oil prices in 2013, Centre for Global Energy Studies stated.
In its report CGES said that oil prices are currently being supported by the world's need to rebuild inventories from the very low levels they reached by late 2011 and, more recently, by rising geopolitical tensions in the Middle East.
"With inventories now recovering, downward pressures on oil prices are beginning to emerge," CGES said.
According to the CGES report, the Eurozone has slipped back into recession and growth prospects elsewhere have deteriorated, weakening forecasts for next year's oil demand growth.
CGES stressed that OPEC member countries will need to be vigilant in the coming months and to act swiftly in response to a weakening market, if they wish to prevent oil prices from falling much below their unofficial target of $100 per barrel.
OPEC members will begin to cut production swiftly once prices begin to soften, in order to avoid a sharp and painful drop in revenues, CGES said.
According to the CGES forecasts, global oil demand will increase by 0.5 percent and 0.8 percent in 2012 and 2013 respectively.
International Energy Agency (IEA) in its latest report said it has cut its forecasts on global oil demand for the fourth quarter of 2012 by 290,000 barrels per day (bpd) to 90.1 million bpd.
IEA expects non-OPEC supplies to grow by 460.000 bpd in 2012 and by 860,000 bpd in 2013, to 54.1 million bpd.
According to IEA's estimates, OPEC oil production decreased by 30.000 bpd to 31.15 million bpd in October.