LONDON: OPEC slightly raised its forecast for world oil demand growth in 2010 ahead of the group s policy-setting meeting in Angola next week, but in a report on Tuesday said market fundamentals could be weak for the next two quarters.
The Organization of the Petroleum Exporting Countries said it now expected oil demand use to grow by 800,000 barrels per day, up by 70,000 bpd from a report last month, following increased consumption in the United States and ongoing growth in the developing world.
While the producer group now expects global oil demand to average 85.1 million bpd in 2010, its estimate is still substantially lower than that of the International Energy Agency, the Paris-based adviser to 28 industrial nations, which forecast demand at 86.3 million bpd on Friday.
A more detailed look at the supply/demand balance indicates that fundamentals will continue to be weak in the first half of the year before improving in the second half, as reflected in the demand for OPEC crude, OPEC said in its monthly report.
OPEC estimated demand for its crude would rise by only 30,000 bpd in 2010 to average 28.6 million bpd due to higher output from countries outside the producer group.
Non-OPEC supply is seen rising by around 310,000 bpd in 2010 following growth of about 500,000 bpd this year, with the majority of output growth coming from Russia and other countries from the Former Soviet Union.
Supplies of OPEC natural gas liquids (NGLs) and non-conventional oils – which are not subject to the producer groups output quotas – are expected to average 5.26 million bpd in 2010, an increase of 490,000 bpd over the current year.
OPEC said output of OPEC NGLs and non-conventional oils rose by around 450,000 bpd in 2009.
According to Reuters calculations, OPEC compliance with the group s production targets slipped to 58 percent in November from 60 percent in October. The group s output – excluding Iraq which is exempt from supply curbs – is currently 1.77 million bpd above the implied target of 24.84 million bpd.
OPEC said oil demand has started to recover in the fourth quarter of 2009 as most major economies emerge from recessions.
Fourth quarter oil demand is bouncing back as a result of better economic activity worldwide, the report said.
Global oil demand is forecast to switch from negative to positive for the first time since the middle of last year. Hence, world oil demand is forecast to show a total decline of 1.4 million bpd in 2009 averaging 84.3 million bpd in 2009, broadly unchanged from last month s assessment.