OPEC trims 2012 oil demand forecast

The Organisation of Petroleum Exporting Countries (OPEC) has trimmed its 2012 global oil demand growth forecast for the second time in two months because of worries about developed countries' economies and higher crude prices. OPEC now expects demand this year of 88.63 million barrels per day, down from its forecast a month ago of 88.76m bpd, it said in its March monthly report. Europe's debt crisis and an oil price rally are the biggest threats to global oil demand this year, the OPEC said while adding it was still pumping above its target despite a slide in Iranian production. This still represents growth compared to 2011, when demand was 87.77m bpd, according to OPEC figures that were revised slightly downwards. "The weak pace of growth in the OECD economies is negatively affecting oil demand and imposing a high range of uncertainty on potential consumption growth,'" the report said. "Although US economic data points toward a better performance, the situation in Europe along with higher oil prices has resulted in considerable uncertainties on the future oil demand for the remainder of the year." Geopolitical factors, most notably tensions over Iran's nuclear programme and speculation of Israeli military action, sent OPEC's reference basket oil price 5.1 per cent higher in February to $117.48 per barrel. The monthly average was the highest since April last year. Among the highlights of the report, world economic growth remains unchanged at 3.4% for 2012 and 3.6% for 2011. The US continues recovering and is expected to grow by 2.2% in 2012, unchanged from the previous month. Japan's stimulus along with expected reconstruction efforts by the private sector are expected to drive 2012 growth to 1.8%, unchanged from last month The Euro-zone’s deceleration has flattened out and growth expectations for 2012 remain at minus 0.2%.