With global economic growth in 2014 projected to increase to 3.5 per cent from 2.9 per cent in 2013, world oil demand is forecast to rise by one million barrels per day, compared with 900,000 b/d last year.
In its recently released Monthly Oil Market Report (MOMR), the 12 member organisation, said the increase would be supported by improved performances by the emerging economies and as the global economy continues to recover in general, it said.
“Oil demand growth continues to come mainly from non-OECD (Organisation for Economic Cooperation and Development) countries, while OECD oil demand is expected to show a further contraction, albeit at a slower rate,” OPEC observed.
However, Gulf News reported that an MOMR article pointed out that the latest forecast is associated with uncertainties related to the pace of economic growth in the OECD region, China and India, as well as to policy reforms in oil product retail prices in some emerging economies.
The improving picture, according to the report is backed by a strengthening of the global economy in 2014, which is slated to expand by 3.5 per cent against 2.9 per cent in 2013, mainly as a result of momentum in the OECD economies.
“However, many challenges remain, ranging from the outcome of postponed fiscal negotiations in the United States, the future monetary policy of major central banks, the resilience of the Eurozone recovery, and continued reforms in the emerging economies to improve structural issues,” the report commented.
It stressed that the signs of a recovery are already visible in rising global industrial production.
According to the MOMR, on the oil supply side, non-OPEC supply growth in 2014 is expected at almost the same level as last year at 1.2 million bpd with some risks in both directions, given possible early start-ups or delays, as well as political, technical and meteorological factors.
Output of OPEC natural gas liquids (NGLs) is expected to rise by 100,000 bpd in 2014, following an increase of 200,000 bpd last year.
The report noted that non-OPEC supply growth in 2013 has performed better than initially expected, supported mainly by the US and Canada, which added around 1 million bpd.
Other contributions to 2013 growth have come from the Sudans, Russia and China, while output disruptions in Syria, along with the decline in North Sea production, partially offset the growth.