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Speculations: Oil demand growth could stall in 2012

Speculations: Oil demand growth could stall in 2012

What with OPEC, U.S. government cut forecasts on Tuesday, oil supply still a big worry, with speculations of the price turning either way.

August 10, 2011 2:03 by

close to pre-Libyan crisis levels.

But Harry Tchilinguirian from BNP Paribas noted that similar to remarks from OPEC and the U.S. government, the IEA said OPEC was still under-producing around 700,000 bpd to fill the supply gap later this year.

“So absent a further increase in production, inventories will have to be drawn or the price has to rise to ration demand,” said Tchilinguirian.

The IEA said OPEC’s spare capacity had shrunk to 3.3 million bpd, a level it described as “fairly meagre in comparison to the totality of currently perceived supply-side risks”.

“Aside from UK field problems, political instability in a number of MENA and sub-Saharan African oil producers also risks curtailing supply further in the next 18 months,” it said. “The big dipper ride may still have further to run”.

By Dmitry Zhdannikov and Christopher Johnson

(Reporting by Dmitry Zhdannikov; editing by Jason Neely)

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