OPEC sees slow increases in oil prices and oil demand

OPEC says the world economy in 2009 is expected to contract by 1.4%, unchanged from last month’s forecast. In 2010, the forecast for the world economy was revised up slightly from 2.3% to 2.4%. The US is now seen to decline by a sharper-than-expected 2.8% in 2009 before returning to growth of 1.2% in 2010. Japan will decline by 6.0% in 2009 and then return to positive growth of 1.1% in 2010.

Within the emerging economies, there was an upward revision for China to now stand at 7.2% in 2009 and 8.0% in 2010. Developing Asia remains the main growth engine in 2009 and 2010.

Although US oil consumption is still showing a massive reduction, increases elsewhere in the world have helped to offset this decline. As a result, the forecast for world oil demand growth in 2009 remains unchanged, showing a decline of 1.6 mb/d (million barrels per day). Chinese June oil demand picked up after a contraction in the first quarter, while India’s oil demand also showed significantly higher growth.

In 2010, world oil demand is expected to halt its decline and grow by 0.5 mb/d. As in recent years, most of the increase will take place in the non-OECD, mainly China, India, Middle East and Latin America. US gasoline demand is expected to improve from the sharp decline seen this year but will remain a wild card in 2010.

The demand for OPEC crude oil in 2009 is estimated to average 28.4 mb/d, a decline of 2.3 mb/d from the previous year. In 2010, the demand for OPEC crude is expected to average 28.0 mb/d a drop of around 0.5 mb/d from a year earlier.