OPEC sees oil demand increasing modestly
By Adam Schreck |
July 16, 2010, Friday
|
Print Edition
Print Edition
OPEC expects demand for oil to creep modestly higher next year, driven by a gradually improving world economy and a growing thirst for energy in developing countries such as China.
The 12-member Organization of the Petroleum Exporting Countries forecast yesterday that demand for crude will grow 1.2 percent, or just over 1 million barrels per day, next year. That's an increase of 100,000 barrels daily from its prediction for 2010. Existing and new supplies will be more than enough to cover increased demand, the group said.
"As a result, the oil market is set to remain well-supplied, especially in light of the ongoing increase in crude oil production capacity," OPEC said in its monthly report.
The producer group repeated its stance that "non-fundamental factors" such as gyrations in the financial markets - not an imbalance of supply and demand - will drive oil price swings going forward.
OPEC expects growth to be strongest outside the world's major developed countries, where it says the economic situation remains "sluggish."
It sees demand coming instead from faster growing countries in the developing world. China, India, the Middle East and Latin America are seen generating much of the increased appetite for oil.
For the US, the world's biggest oil consumer, OPEC sees demand for gasoline returning to "normal growth." But the Vienna-based organization cautioned that there is "considerable uncertainty" about the pace of the increase.
OPEC's assessment of a "well-supplied" market suggests it is not aiming for now to roll back a series of hefty supply cuts made in late 2008. Those cuts, aimed at slashing output by 4.2 million barrels per day, are credited with helping engineer a rebound in prices from the low US$30s to the mid US$70s - a level OPEC argues is fair for producers and consumers.
The 12-member Organization of the Petroleum Exporting Countries forecast yesterday that demand for crude will grow 1.2 percent, or just over 1 million barrels per day, next year. That's an increase of 100,000 barrels daily from its prediction for 2010. Existing and new supplies will be more than enough to cover increased demand, the group said.
"As a result, the oil market is set to remain well-supplied, especially in light of the ongoing increase in crude oil production capacity," OPEC said in its monthly report.
The producer group repeated its stance that "non-fundamental factors" such as gyrations in the financial markets - not an imbalance of supply and demand - will drive oil price swings going forward.
OPEC expects growth to be strongest outside the world's major developed countries, where it says the economic situation remains "sluggish."
It sees demand coming instead from faster growing countries in the developing world. China, India, the Middle East and Latin America are seen generating much of the increased appetite for oil.
For the US, the world's biggest oil consumer, OPEC sees demand for gasoline returning to "normal growth." But the Vienna-based organization cautioned that there is "considerable uncertainty" about the pace of the increase.
OPEC's assessment of a "well-supplied" market suggests it is not aiming for now to roll back a series of hefty supply cuts made in late 2008. Those cuts, aimed at slashing output by 4.2 million barrels per day, are credited with helping engineer a rebound in prices from the low US$30s to the mid US$70s - a level OPEC argues is fair for producers and consumers.
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