OPEC has raised its forecast for world oil demand growth

OPEC has raised its forecast for world oil demand growth slightly but says fuel consumption may not return to levels seen before the global economic slowdown, even if growth recovers.

OPEC’s monthly report on Wednesday raised its estimate for 2010 oil demand growth to 750,000 barrels per day (bpd) compared with its projection of 700,000 last month. It said most signs pointed toward gradual growth in fuel consumption, but there were risks to the downside.

“A potentially weak economic recovery along with higher prices are two main factors that may dampen world oil demand in the coming year,” the report said.

OPEC said changes in government policy and behavior could erode demand for fuel, especially in sectors such as transportation. “Even if the expected economic recovery materializes, it remains to be seen whether demand would be able to return to pre-crisis levels.”

Demand for OPEC’s own crude would be 28.51 million bpd in 2010, up 110,000 bpd from its previous estimate, based on expectations of higher world demand and steady non-OPEC supply.

OPEC is the second major forecaster to lift its demand estimates this week. On Tuesday, U.S. government agency the Energy Information Administration increased its 2010 world oil demand growth forecast to 1.26 million bpd.

The IEA will complete this week’s forecasting with its report on Thursday, two days after releasing its annual World Energy Outlook. The IEA, adviser to 28 industrialised countries, said in Tuesday’s report that it expected world oil demand to rise 1 percent a year to 105 million bpd by 2030, from around 86 million bpd in 2007.

Tags:  oil demand, OPEC