(MENAFN - Kuwait News Agency (KUNA)) The International Energy Agency (IEA) said here Friday that demand for crude oil worldwide was continuing to ease, largely because of the weak in international climate and a slowdown in economic activity.
But the Agency noted that crude prices continue to remain firm in the context of tensions in some producer areas, like Iran, where there is a selective embargo on oil exports from that country.
On publication of the IEA "Monthly Oil Market Report", WTI was quoting at USD 84.45 per bbl, up USD 0.4 per bbl, while Brent blend was trading in early October at USD 115 per bbl, up USD 2.0 from earlier quotes.
Technically, the IEA observed, the market could be seen to be returning to "normal conditions," or a "business as usual" context, with the "unexpected" rebuilding of OPEC spare capacity and other factors.
"But the clearest departure from 'business as usual' may be the reduction in Iranian exports since July as a result of expanded international sanctions.
Whereas many expected the sanctions to lose some bit in September, as Iranian exporters and some of their clients were reported seeking ways to get around insurance constraints, in fact, compliance appears to have tightened and Iranian crude deliveries fell to an estimated 860,000 b/d, a new low," the report said.
"This rebalancing of supply and demand will be accompanied with such sweeping changes in regional balances that it is more likely to feel like uncharted territory than familiar ground," the report added.
Separately, the IEA stated that it was revising global demand growth down by 100,000 bbls from a month ago and was now estimated overall demand for 2012 at 89.7 million barrels per day (mb/d), up only 700,000 b/d from 2011. For 2013, the Agency said demand growth was unchanged from earlier forecasts and was expected to rise 800,000 to reach 90.5 mb/d.
The International Monetary Fund's predictions of 3.3 percent global economic growth for 2012 and 3.6 percent world GDP expansion in 2013 had already been taken into account by the report and did not affect estimations in this month's report, the IEA said.
On the supply side, OPEC production fell to an eight-month low in September, down 510,000 b/d to 31.17 mb/d, the report noted.
"Higher supplies from Iraq and Libya failed to offset reduced output from Nigeria, Iran and Saudi Arabia," the IEA report remarked. Meanwhile, non-OPEC output growth is expected to reach 700,000 b/d in 2013, rising to 53.9 mb/d), after outages reduced supply levels to 53.2 mb/d in 2012. OECD industry stocks declined by a counter seasonal 11.2 million bbls in August led by a stronger than seasonal draw in the US after Hurricane Isaac disrupted production and imports.
However, preliminary data suggest stocks rebounded by 13.0 million bbls in September and forward consumption cover now stands at 58.8 days.