OPEC raises oil demand forecast, oil prices higher

Oil prices gained 1.2 percent as OPEC raised its 2010 global oil consumption forecast on expansion within emerging economies. The IEA last week upgraded its demand prediction. Crude oil prices also climbed as the dollar fell to the lowest against the euro since August 2008.

“OPEC revised up its global oil consumption forecast for 2010 and that comes on the back of the IEA revising up their forecast,” said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne. “It is further fueling the sentiment that the demand outlook is better than what a lot of people are expecting.”

Crude oil futures for November delivery gained as much as 81 cents, or 1.1 percent, to $74.96 a barrel in electronic trading on the NYMEX, and traded at $74.77 at 9:27 a.m. Singapore time. Prices last reached $75 on August 25, the highest since October. Oil has risen 68 percent this year.

Total crude consumption will increase 700,000 barrels a day to 84.93 million barrels a day next year, led by demand from emerging markets, OPEC said in a monthly report. That’s 370,000 barrels a day higher than the group’s previous forecast.

This year, the group estimates demand will contract by 1.4 million barrels a day to 84.24 million barrels a day. The US currency traded at $1.4846 per euro at 8:59 a.m. in Tokyo from $1.4854 in New York, when it reached $1.4876, the weakest since August 22, 2008.

Tags:  oil demand, oil prices, OPEC