OPEC today scissored its demand numbers for 2012 again as Asian growth slows, but the group still pumped at levels not seen in three years as Iranian disruptions fears continues.
In its closely-watched monthly report, the Organization of Petroleum Exporting Countries knocked off about 120,000 barrels a day out of its global oil growth demand estimate for 2012, to about 940,000 barrels a day.
So far, OPEC has slashed near a third of the amount it initially expected consumers to add to their 2012 needs.
“Waning [developed] economies are negatively affecting the oil market and imposing a considerable range of uncertainty over the short term,” the group said. It cited question marks over Europe’s ability to survive its debt crisis and fizzling appetite for gasoline among U.S. motorists.
More worryingly, OPEC warned the economies of India and China–the engines of global fossil-fuel demand–will now grow more slowly than it expected. Overall, the group cut its world economic growth estimate by one percentage-point to 3.4% in 2012.
While demand growth is losing steam, OPEC, whose members pump over a third of the oil consumed each day worldwide, is producing at levels not seen since cuts decided during the 2008 recession.
The group said its own crude output increased by 56,200 barrels per day to 30.898 million barrels a day in January. That’s not far from a million barrels a day above a target agreed mid-December, and 1.3 million barrels a day over the needs it sees for its crude in the first quarter.
Gulf nations either pumped more barrels or at least higher than normal at a time when international pressure against Iran’s nuclear program–including a planned European ban–are expected to dent Iran’s exports.
Though consumers will be relieved to learn OPEC is making a comfortable cushion of oil available, the trend could fuel mounting strife within the group’s ranks.
Iran’s own production has fallen by over 200,000 barrels a day in three years and continued declining in January, based on OPEC’s numbers, as existing sanctions bite into investment.
The Islamic republic has warned its Gulf neighbours against any attempt to replace its oil on global markets. But though Gulf nations deny that’s the case, analysts say they are keeping output high to as to signal their readiness to make up for any missing barrels.
