The forecast of global oil demand for 2013 has been adjusted upwards by 90 kb/d following stronger-than-expected data for July and August. Estimates of July demand were raised by 215 kb/d for the US, 110 kb/d for Egypt, 85 kb/d for Chinese Taipei and 65 kb/d for France. Partial offsets were provided by Germany (-70 kb/d), Nigeria (-45 kb/d) and the Netherlands (-45 kb/d). For August, estimates were raised by 110 kb/d for Russia, 95 kb/d for Germany and 60 kb/d for China, declines in India (-125 kb/d) and Japan (-60 kb/d) provided a partial offset. Average growth of around 1.0 mb/d (or 1.1%) is forecast for 2013, to 91.0 mb/d.
Signs of improvement in the European economy support the upward revision to the demand forecast, while reports of higher-than-anticipated power sector usage in other regions also contributed. Problems with natural gas supplies lifted oil demand for electricity generation in Mexico, much of northern Africa and the Middle East. Nuclear outages, coupled with unusually warm temperatures, also raised Japanese oil use. Meanwhile, European demand data have surprised on the upside recently amid reports that the euro zone’s recession ended in 2Q13 and signs of improvement in business confidence.
Improved economic signals were partly offset by the US Government shutdown. US government funding issues in October raised macroeconomic fears, as “non-essential” services were closed on October 1, and as many as 800,000 workers put on unpaid leave. The then looming October 17 deadline for addressing the debt ceiling is also weighed on consumer sentiment. Such issues contributed to the IMF reducing its global GDP projections for both 2013 and 2014.
Information from International Energy Agency/Hellenic Shipping News was used in this report.