World oil demand grows

On Tuesday, according to reports on Thompson Reuters, OPEC said that world demand for oil will be stronger than expected next year, this report adding to signs that an improved economic outlook will boost oil consumption.

The 12-member group is the latest forecaster to lift its oil demand estimates in the past week, following upward revisions from the International Energy Agency and the US government's Energy Information Administration.

Demand for OPEC crude will average 28.39 million barrels per day (bpd) in 2010, the Organisation of the Petroleum Exporting Countries said in a monthly report. That is up 300,000 bpd from its previous forecast.

"The world economy now appears to be entering into a new phase, moving from a period of containing the crisis to one of economic recovery," OPEC said in its October Monthly Oil Market Report.

OPEC currently source more than a third of the world's oil. It also raised its forecast for global oil demand growth in 2010, expecting world oil use to rise by 700,000 bpd to an average of 84.93 million bpd.

The growth rate is up 200,000 bpd from the previous estimate. But OPEC only expects demand to expand at about half the rate of the IEA, an adviser to 28 industrialised countries, in 2010.

Arabian Business reports that oil prices rose on Tuesday, boosted by the prospect of stronger demand and a weaker dollar. US crude was up 44 cents at US$73.71 as of 1448 GMT, nearing its 2009 high of US$75.00.

The world economy is expected to expand by 2.7 percent next year after a 1.2 percent contraction in 2009. Next year's forecast is up from the growth rate of 2.5 percent previously assumed.

While oil use in top consumer the US is rebounding from a steep decline, emerging economies such as China, the Middle East, India and Latin America are expected to drive demand growth next year, OPEC said.

Since September last year, OPEC has been holding down its production as the recession curbed demand. The group agreed at a 9 September meeting to keep in place supply curbs totalling 4.2 million bpd.

The report said OPEC production was rising, despite the agreement last month to hold output steady.

 

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