OPEC Raises 2009, 2010 Oil Demand Forecasts on Economic Rebound

Sept. 15 (Bloomberg) -- The Organization of Petroleum Exporting Countries raised its global oil demand forecasts for this year and 2010 on expectations the world economy will return to growth.

OPEC, responsible for about 40 percent of worldwide oil supply, boosted its 2010 outlook by 150,000 barrels a day and 2009 by 140,000 barrels a day. The group now predicts that consumption will contract 1.8 percent this year to average 84.05 million barrels a day, and then expand 0.6 percent in 2010 to 84.56 million a day.

“Evidence of an impending upturn in the world economy appears to be gathering,” OPEC’s Vienna-based secretariat said today in its monthly market report. Oil prices around $70 a barrel “are likely to persist.”

OPEC, which kept production quotas unchanged last week to prevent higher prices damaging the recovery, raised demand projections for its own crude next year by 80,000 barrels a day. That still represents a decline of 500,000 barrels a day in the world’s “call-on-OPEC” to 28.1 million a day as producers outside the group pump more.

The International Energy Agency upgraded its own 2010 consumption outlook three times as much as OPEC in a report on Sept. 10. The Paris-based IEA, adviser on energy policy to 28 nations, ramped up its 2010 forecast 450,000 barrels a day to an average of 85.7 million a day.

The 11 OPEC members bound by output quotas, which exclude Iraq, increased supplies to 26.334 million barrels a day last month, according to the report. That weakens their compliance rate with the record output curbs announced last year to 65 percent.

Record Cut

Crude oil futures last traded in New York at $68.91 a barrel, having gained 53 percent this year as a result of the economic rebound and OPEC’s implementation of its biggest-ever production cut.

Still, OPEC expects that “crude demand is likely to remain weak over the coming months” as refiners lower imports while performing seasonal maintenance before winter. “A colder winter would not be sufficient to remove the massive accumulation in distillate stocks, especially as part of its demand may be met by inexpensive natural gas.”