Opec pushed down its forecast for oil demand growth for the fourth month in a row as worries mounted about the world economy.
Opec forecasts slower oil demand growth
The oil producers group cut 180,000 barrels per day (bpd) from its forecast for this year's oil demand growth as the euro-zone crisis deepens. Demand in emerging economies, it noted, was also tinged with uncertainty because of China's new policies to cut fuel consumption and a fuel price hike in India.
"The magnitude of the recovery remains uncertain," Opec said yesterday in its monthly report.
It set this year's oil demand growth at 900,000 bpd and next year's at 1.2 million bpd, a reduction of 700,000 bpd from its prediction last month.
Brent crude, the European benchmark, was down yesterday from its April high of US$126 a barrel to $107.52.
Hussain Al Shahristani, the former oil minister of the Opec member Iraq, echoed the bearish predictions.
"There are no signs yet of complete world economic recovery," Mr Al Shahristani told Bloomberg News. "As a matter of fact there are some worrying signals in the euro zone and elsewhere, even in Asian countries, that the world is heading toward another recession."
Opec is next scheduled to meet about its production targets in December.
Meanwhile, the former leaders of the oil industry in Libya, whose supplies have been mostly cut off from international markets since an uprising began in February, issued optimistic forecasts for the return of the country's sweet crude to markets.
Abdalla El Badri and Shokri Ghanem, both former chairman of Libyan National Oil Company, predicted a return to pre-war pumping levels in 18 months at a conference in London yesterday.
"Everything looks fine," Mr El Badri, who is the Opec secretary general, said, referring to oil prices.
Libya pumped about 1.6 million bpd before February. But predictions of how long it will take to regain those levels might be overly optimistic, said Ehsan Ul Haq, a senior market consultant at KBC Energy Economics.
"We might see production rising to about 1 millon bpd, but after that there might be problems," he said.