OPEC Ups 2010 World Oil Demand Growth Forecast on US Recovery

LONDON (Dow Jones Newswires), Aug. 13, 2010

The Organization of Petroleum Exporting Countries Friday revised up its forecast for global oil demand growth this year as a small U.S. recovery drives a crude consumption rebound.

The group, in its monthly oil market report, upgraded its forecast for world oil demand growth by 100,000 barrels a day to one million barrels a day. OPEC's 12 members accounts for about 40% of the 86 million barrels consumed globally daily.

The International Energy Agency earlier this week also raised its forecast for global oil demand by 80,000 barrels a day for 2010.

China and other Asian nations will make up most oil demand growth in 2010. But North American consumption is expected to grow slightly by 300,000 barrels a day "due to an extremely low base in last year's oil demand in addition to the minor economic recovery," OPEC said.

The group warned, however that "the world economy is facing increasing headwinds that will slow the growth momentum going forward," echoing a U.S. Federal Reserve warning Tuesday over the slowdown of economic recovery.

Much of the extra oil demand in 2010 is set to be soaked up by non-OPEC supply, which is expected to rise by about 800,000 barrels a day, due to higher-than-expected output from Russia (which reached record production in July), the U.S., and China.

While the Deepwater Horizon disaster has led to a moratorium on exploration in the Gulf of Mexico, U.S. oil production is now seen rising 300,000 barrels a day this year, following an upward revision of 80,000 barrels a day.

However, "risk remains on the high side given the forecast for an active hurricane season as well as the impact of the deepwater moratorium," OPEC said.

Copyright (c) 2010 Dow Jones & Company, Inc.