Opec upgrades forecasts for world oil demand

World oil demand will decline slightly in 2009 but start growing again next year, the Opec oil producers' cartel said yesterday in its monthly report, upgrading slightly a previous forecast.

World oil demand this year was expected to contract by 1.41 million barrels per day (bpd) to 84.24 millilon bpd, the Organisation of Petroleum Exporting Countries said in its October report.

A month ago, Opec had been pencilling in a fractionally bigger contraction of 1.56 million bpd for this year.

Then, in 2010, "world oil demand is anticipated to halt its decline and register growth of 0.7 million bpd to average 84.9 million bpd," the cartel said. That figure was also upgraded slightly from the previous report, when Opec had been pencilling in growth next year of 0.5 million bpd.

"As mentioned in the last report, the world economic picture is getting slightly better than anticipated," the cartel wrote, insisting however that recovery would be "slow and weak".

The upward revision in world oil demand of 0.2 million bpd "is mainly for the first half of the year," Opec said.

"And the bulk of the growth in next year's oil demand will take place in non-OECD (Organisation for Economic Cooperation and Development) countries, mainly China, the Middle East, India and Latin America." Most of the demand would be seen in the industrial, transport and petrochemical sectors.

"In addition to the world economy, the main factors that might play an important role in next year's oil demand are oil prices, taxes and the removal of price subsidies," Opec said.