August 10, 2011 1:19 AM EDT
Global oil demand will grow less than previously projected this year, according to forecasts on Tuesday from the U.S. and OPEC, as a worsening economic outlook will curb consumption in developed countries.
The cut by the U.S. Energy Information Administration and a more pessimistic forecast by the Organization of the Petroleum Exporting Countries were in line with reductions by other forecasters such as investment bank Barclays Capital, as slowing growth hits consumers and businesses.
The reports come as grim economic news has stoked fears of another global downturn, with U.S. oil prices falling more than 15 percent since the start of last week in a sharp worldwide flight from risk.
"Dark clouds over the economy are already impacting the market's direction," OPEC said in its monthly report. "The potential for a consequent deterioration in market stability requires higher vigilance and close monitoring of developments over the coming months."
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The EIA cut its forecast of world oil demand growth demand by a modest 60,000 barrels per day to 1.37 million bpd.
In contrast, OPEC, source for more than a third of the world's oil supply, saw demand growth down 150,000 bpd from its previous forecast, to 1.21 million bpd.
OPEC lowered its growth forecast for next year marginally, by 20,000 bpd to 1.30 million bpd, while the EIA raised its forecast for 2012 by 60,000 bpd, with consumption now expected to climb 1.64 million bpd next year.
The International Energy Agency, which will issue its outlook for world oil markets on Wednesday, currently predicts 2011 demand growth of 1.2 million bpd.
The full impact of increasing economic turmoil in Europe, along with the downgrade in the U.S. credit rating late last week, may not be fully reflected in these reports, analysts said.
"We've seen bouts of terrible economic data. Poor manufacturing data, the outlook for employment is not particularly great," said Matt Smith, an analyst for Summit Energy.
"There will be a correspondent effect on oil demand because of that. The U.S. is after all the largest economy in the world," Smith said.
Lower oil prices could prove stimulative in the long run for economies globally and help lower gasoline prices that have hurt U.S. President Barack Obama's efforts to boost the economy ahead of next year's elections.
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