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OPEC, which pumps 40 percent of the world's crude, forecast Thursday a 1.2-percent increase in global oil demand in 2011, with demand for its own crude oil to rise for the first time in three years.

In its latest monthly report, the Organization of Petroleum Exporting Countries (OPEC) held its forecast for world oil demand growth for 2010 steady at 1.1 percent, or an extra 0.95 million barrels per day (bpd).

And in 2011, growth would pick-up only fractionally to 1.2 percent or an additional 1.0 million bpd, "reflecting continued caution about the pace of the global economic recovery," OPEC said.

Nevertheless, demand for OPEC crude -- the 12-country cartel accounts for 40 percent of the world's oil -- was set to see growth of 0.2 million bpd, "the first increase in three years," it added.

OPEC's latest forecasts differ slightly from those recently published by the International Energy Agency (IEA), the energy strategy arm of the Organisation for Economic Cooperation and Development.

While the IEA also forecast stable demand growth both this year and next year, it put oil demand this year at an average 86.5 million bpd and 87.8 million bpd next year.

OPEC's forecasts are slightly lower at 85.4 million bpd and 86.4 million bpd respectively.

In 2010, "the current economic situation in most developed countries remains sluggish. The economic recovery is not only slow, but also facing considerable uncertainty," the cartel said.

Nevertheless, the global economic recovery was expected to start during the second half of 2010 and would "continue through the whole of 2011 with more or less even distribution among the four quarters," it wrote.

As in 2010. oil demand growth next year would take place in non-OECD countries, notably China, India, the Middle East and Latin America.

The United States, the world's biggest oil consumer, would remain the key to recovery, OPEC said.

"Any further delay in (the US) economic recovery will of course lead to a downward revision in the world oil demand in total," it said.

And it added: "Other factors that might play an important role in next year's oil demand are retail oil product prices, taxes and removal of retail price subsidies worldwide."

Story from AFP
AFP 07/15/2010 11:41

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