WASHINGTON (Reuters) - Global oil demand will grow less than previously forecast this year and in 2012 due to a more moderate economic recovery and higher fuel prices, the top U.S. energy forecasting agency said on Tuesday.
In its new monthly outlook, the U.S. Energy Information Administration cut its forecast for 2011 world oil demand growth by 270,000 bpd to a 1.43 million-bpd increase this year. Oil demand in 2012 will rise 1.58 million bpd, about 10,000 bpd lower than the agency forecast last month.
The forecast came after OPEC also said on Tuesday that world oil demand would grow more slowly in 2012 because of a fragile global economy and deepening decline in consumption in Europe.
“EIA still expects oil markets to tighten as growing liquid fuels demand in emerging economies and slowing growth in non-OPEC supply maintain upward pressure on oil prices,” the EIA said.
Helping western countries meet their oil demand for the rest of this year will be the recent coordinated release of some 60 million barrels of emergency oil.
The extra supply means industrialized countries won’t have to dip as deep into their commercial oil inventories. Western nations will draw down their commercial oil stocks by 71 million barrels during the second half of this year, much less than 127 million barrels previously forecast, EIA said.
EIA said it expects West Texas Intermediate oil prices to average $98 a barrel in 2011, down from its previous forecast of $102 a barrel, but about 24 percent higher than last year.
In 2012, oil prices are expected to average $103 a barrel, down from the $107 a barrel forecast projected in last month’s report.
In the United States, which is the world’s biggest oil consumer, oil consumption is expected to increase by just 30,000 bpd this year, down sharply from the 150,000 bpd growth previously estimated.
Oil demand is expected to grow by 140,000 bpd in 2012, however.
U.S. oil demand in the third quarter is forecast to be 60,000 bpd less than a year earlier, but fuel consumption will rebound in the fourth quarter and increase by 110,000 bpd over the same period last year, the agency said.
To help meet global oil demand, top OPEC producer Saudi Arabia has boosted its oil output, raising its June production to 9.5 million barrels per day in June from 8.9 million bpd in May, the EIA said.
Developing countries are expected to raise their oil use the most, with China, Brazil and the Middle East leading the way. Among industrialized countries, the EIA said fuel demand will surge in the United States, Canada, Mexico and South Korea over the next two years, offsetting declines in Europe.
“Consumption in Japan is forecast to increase slightly in 2011 but then fall in 2012 as power plants recover from the impacts of the earthquake and tsunami,” the agency said.
Editing by Lisa Shumaker