EIA Trims World Oil Use Growth Forecast for 2013, 2014

World oil demand will rise in 2013 and 2014, but moderate recovery in economic growth will keep the gains lower than projected a month earlier, U.S. government forecasters said Tuesday.

In 2013, rising consumption in China and in other developing nations is expected to offset weakness in European economies, the Energy Information Administration said.

World oil use is expected to rise by 1 million barrels in 2013 to 90 million barrels a day. That’s some 140,000 barrels a day below the forecast made a month earlier. In 2014, global demand is expected to rise to 1.3 million barrels a day, about 200,000 barrels a day less than the EIA’s March forecast.

Oil demand in China, the world’s biggest oil consumer after the U.S., is expected to rise by 450,000 barrels a day this year, to 10.68 million barrels a day, following growth of 380,000 barrels a day in 2012. The EIA said Chinese oil use grew at an average of 540,000 barrels a day between 2004 and 2010.

“Recent indicators of weaker industrial data at the beginning of 2013 signal slower growth than in prior years,” the EIA said.

In 2014, China’s demand is expected to climb by 510,000 a barrels a day to 11.19 million barrels a day.

Developing nations outside of the Organization for Economic Cooperation and Development are expected to show a rise of 1.31 million barrels a day in oil use in 2013 and a 1.48 million barrel rise in 2014, as OECD demand slips because of declining consumption in Europe.

U.S. oil is expected to rise fractionally to 18.62 million barrels a day this year from a 16-year low of 18.55 million barrels a day in 2012. Next year, U.S. oil consumption is projected to inch up to 18.65 million barrels a day.

The EIA continues to project that non-OECD demand will top OECD demand for the first time in 2014, by 470,000 barrels a day.

Projected world fuel supply increases by 600,000 million barrels a day in 2013 to 89.75 million barrels a day and by 2.1 million barrels a day in 2014 to 91.8 million barrels a day, according to EIA’s forecasts. The current year projection is a 100,000 barrels a day reduction from a month ago, while the 2014 figure represents a 40,000 barrels a day rise. Most of the supply growth comes from the U.S. and Canada and other countries that are not members of the Organization of the Petroleum Exporting Countries, the EIA said.

Non-OPEC crude oil output is expected to rise by 1.06 million barrels a day in 2013 and by 1.58 million barrels a day in 2014, the EIA said. The gains would mark the first time since 2009 that non-OPEC production gains topped growth in global oil demand.

Rising non-OPEC output is expected to cause OPEC to trim output by more than 700,000 barrels a day this year, to 30.18 million barrels a day. The EIA estimated March OPEC output at 29.83 million barrels a day, down 1.37 million barrels a day from a year earlier and the lowest level since October 2011.

Company-held oil inventories in OECD nations are expected to cover 56.2 days of demand at the end of 2013, down from 57.9 days of cover at the end of 2012, the EIA said. By the end of 2014, OECD stocks are expected to cover 57.8 days of demand.

WSJ