A report published by OPEC on Wednesday painted a gloomy picture of the world's economy, as the group of oil producers lowered its forecast for global oil demand growth this year and warned of a continued slowdown in 2013.
In its monthly oil market report, the Organization of Petroleum Exporting Countries said it saw oil demand growth falling to 800,000 bpd this year, 100,000 bpd lower than its previous projections. Overall world oil demand is pegged at 88.81 million bpd this year.
The group of oil producers kept its forecast for next year's demand growth unchanged at 800,000 bpd, but warned that "considerable uncertainties' could knock as much as 20% off that figure.
Economic growth is mostly set to come from emerging markets, but these countries are reliant on exports to developed economies, which have performed sluggishly this year. Moreover, improvements in the global economy are dependent on the success of government and central-bank action.
"Risks to the forecast for 2013 are primarily on the downside, due to the turbulence in the world economy," it said.
Given the increasingly dismal economic picture, the group of oil producers said it expected supply to remain comfortable in the coming year, as increases in output from non-OPEC members outpaced demand growth.
The market "will be characterized by high volumes of crude supply and increasing production capacity," in the coming year, the report said.
The report showed that OPEC production remained high last month, even as oil prices climbed to their highest level since May.
The group's output fell nearly 265,000 bpd in September compared to August due to declines in production in Angola and Nigeria, but still remained above 31 million bpd, data from secondary sources showed.
Saudi Arabia's oil minister said Tuesday that the country would continue to pump about 10 million bpd of oil this month and would like to see oil prices fall to about $100/bbl.
The data from secondary sources showed Saudi output rose to 9.85 million bpd in September from 9.81 million bpd in August.
The data also showed Iranian output was steady in September, at 2.72 million bpd, following months of declines the country's production as strict sanctions designed to deter the Islamic Republic from pursuing its nuclear program hit its oil industry.
Dow Jones Newswires