When the International Energy Agency (IEA) in July 2011 first published its expectations for oil demand, this initial forecast called for consumption to jump by 1.5 million barrels per day in 2012. This prediction reflected the International Monetary Fund’s (IMF) optimistic outlook that global economic growth would accelerate to 4.4 percent in 2012, a slight improvement from the estimated 4.2 percent expansion that occurred last year.
But the IMF subsequently revised its estimate of 2011 economic growth to 3.8 percent and lowered its 2012 forecast to 3.28 percent. For 2013, the IMF expects the global economy to expand by 3.62 percent.
In response to this revised outlook for the global economy, the IEA also more than halved its expectations for oil demand growth to an incremental increase of 670,000 barrels of oil per day and called for global consumption of crude to climb by 800,000 barrels per day in 2013.
We expect the world economy to recover somewhat in early 2013, with conditions in the EU stabilizing and China on the path to grow its gross domestic product at an annual rate of 7 percent to 8 percent. If our forecast pans out, the risk of the IMF’s economists and other analysts steadily lowering their expectations for 2013 global economic growth should be muted.
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Elliott and Roger on Jul. 27, 2022