UPDATE 3-EIA boosts 2012, 2013 oil demand growth forecast

Tue Feb 7, 2012 7:59pm GMT
 

* First demand growth increase since October

* Lowers non-OPEC output growth forecast for 2012

* Warns South Sudan output may fall sharply this year (Adds details of US supply growth, Non-OECD demand growth)

By David Sheppard and Matthew Robinson

NEW YORK, Feb 7 (Reuters) - The U.S. Energy Information Administration on Tuesday boosted its forecast for global oil demand growth for the first time since October and forecast the market would tighten as gains in non-OPEC production lag.

The U.S. government agency hiked estimates for 2012 oil demand growth from last month's report by 50,000 barrels per day for this year to 1.32 million bpd. It revised 2013 growth up by 20,000 bpd to 1.49 million bpd.

It is the first time the EIA had increased its global oil demand growth forecast in four months, having trimmed expectations by a total of 270,000 bpd in the previous three reports.

The agency also reduced its forecast for output from non-OPEC countries by 140,000 bpd to 52.54 million bpd for 2012, which is up 770,000 bpd from 2011.

"EIA expects that the market will rely on both inventories and increases in production of crude oil and non-crude liquids from OPEC members to meet world demand growth," the agency said in its monthly Short Term Energy Outlook, forecasting benchmark U.S. oil prices could average more than $100 a barrel for the first time ever in 2012.

Gasoline prices in the United States are expected to average $3.55 a gallon in 2012, up 2 cents a gallon on last year. The EIA cautioned, however, that the oil market is currently pricing a 1 in 4 chance they could jump above $4 a gallon in June.

U.S. consumption is expected to be largely flat in 2012 at 18.87 million bpd, the EIA said. Demand growth is centered in countries outside the developed economies of the OECD, with non-OECD consumption growth revised up to 1.48 mln bpd to total 43.80 million bpd.

SUDAN WARNING

The EIA said it expected an oil exports dispute between South Sudan and Sudan to cut oil production there this year by more than half to 210,000 bpd from 425,000 bpd in 2011. Output was expected to bounce back to around 340,000 bpd in 2013.

The agency expected other output declines in Russia, Mexico and the United Kingdom to be offset by growth from U.S. shale formations, Canada, Brazil, Kazakhstan and China.

U.S. supply growth was revised higher for both 2012 and 2013 and output is now expected to rise by more than 400,000 bpd over the next two years, the EIA said, up from the previous forecast of 330,000 bpd.

The EIA increased its estimates for 2013 non-OPEC production growth by 90,000 bpd with total output forecast at 53.39 million bpd.

The EIA also said it expected the United States to remain a net oil product exporter this year. Amid slackening U.S. demand for products such as gasoline, the country was expected to have net product exports of 350,000 bpd in 2012, and a more modest 320,000 bpd in 2013, the EIA said.

The agency cautioned, however, that its forecasts remained subject to significant uncertainty given tensions between the West and Iran and the ongoing euro zone crisis.

"Should a significant oil supply disruption occur, and OPEC members do not increase production, or projected non-OPEC projects come online more slowly than expected, oil prices could be significantly higher than projected in this Outlook," the EIA said.

"If the pace of global economic growth fails to accelerate in Organization for Economic Cooperation and Development (OECD) countries, or if economic growth slows in non-OECD countries, reduced demand could result in lower prices." (Additional reporting by Joshua Schneyer in New York; Editing by Lisa Shumaker, Bob Burgdorfer and David Gregorio)

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