OPEC warns of a drop in oil demand

The Organization of the Petroleum Exporting Countries (OPEC) warns that world demand could be less than expected in 2013 because of economic weakness in parts of the world including Europe, China, and India, Reuters reports.

In its most recent monthly report, OPEC reduced its forecast for demand in 2013 only slightly - by 10,000 barrels per day (bpd) to 770,000 bpd - but said demand could end up being 20 percent below its forecast.

"The forecast oil demand growth has a notable downside risk, especially in the first half of the year," the report said.

"Much of this risk is attributed to not only the OECD (the Organisation for Economic Co-operation and Development, which includes much of Europe and the U.S.), but also China and India."

OPEC, which represents nations that produce more than a third of the world’s oil, has also predicted less demand for its oil because of higher supply from other sources, including shale oil.

The report also said OPEC production fell by 67,000 bpd in October to 30.95 million bpd, with Nigeria, Saudi Arabia, and Iran producing less oil.

Last week Ship & Bunker reported that the Chinese government has been attempting to adjust its refinery capacity to address a slowdown in demand.