Barclays: Global oil demand growth of 1.38 mb/d expected in 2012

Barclays: Global oil demand growth of 1.38 mb/d expected in 2012

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LONDON(Commodity Online): The global balances projected for 2012, remain supportive for Crude Oil prices, occasioning the increase in forecast average prices for 2012, said Barclays in a report.

“Among the key macroeconomic assumptions, our demand forecasts are based on 4.3% global GDP growth in 2012, a little higher than the 4% forecast for this year. US GDP growth is forecast at 3.4% in 2012, a substantial improvement from the 2.5% in 2011, and Chinese growth is forecast at 8.7%, a deceleration from the 9.3% pace of the current year. In oil demand terms, we see growth of 1.38 mb/d, marginally down from the current 1.59 mb/d forecast for 2011, with the absolute level of global demand averaging 87.8 mb/d in 2011.”

The oil demand profile will continue to be dominated by non-OECD demand growth, which Barclays expect to be 1.57 mb/d, while OECD oil demand growth slips back further into negative territory of -0.19 mb/d, following a fall of 0.09 mb/d this year.

On a country level, Barclays see the main oil demand increases as coming from China (+0.71 mb/d), Brazil (+0.18 mb/d) and Saudi Arabia and India (+0.12 mb/d each), with the main continuing weakness being Europe, which is forecast to fall by 0.12 mb/d.

Both Japanese and US demand are forecast to fall by 0.04 mb/d.

“Our demand growth forecasts assume some significant effects from increased energy efficiency and oil demand suppression policies in the US and Europe in particular, and overall we judge the bias on the forecasts as being towards the cautious side in terms of 2010 and 2011 demand growth.”

“In judging the likely path of 2012 demand, we would note that contrary to a wide strand of current market sentiment, 2011 demand forecasts have not as yet disappointed significantly relative to their initial levels. Indeed, our own 2011 demand forecast has tracked a little upwards over the past year. When introduced last July our global demand growth forecast for 2011 was 1.59 mb/d, and one year on and half-way through the year, it currently stands a little higher at 1.68 mb/d.”