OGJ Oil Diplomacy Editor
LOS ANGELES, Nov. 12 -- The Organization of Petroleum Exporting Countries, expressing cautious optimism about the global economic outlook, increased its world demand growth estimates for 2010 and 2011.
"Despite initial economic assessments that underestimated the second half of the year's economic activities, oil demand is picking up in the third and fourth quarters," OPEC wrote in its latest Monthly Oil Market Report.
"Consumption in the [Organization for Economic Cooperation and Development] has outpaced expectations as a result of the stronger-than-expected economic activities, supported by various stimulus plans," the OPEC report said.
Last week, the organization said that while recovery from the global economic crisis has been faster than previously expected, precrisis demand levels from 2007 were unlikely to be repeated again until 2011 (OGJ Online, Nov. 5, 2010).
OPEC now sees world oil demand growth of 1.32 million b/d or 1.6% to 85.78 million b/d for 2010, compared with 1.3% previously, while demand growth will increase by a further 1.17 million b/d or 1.4% to 86.95 million b/d in 2011, instead of by 1.2% as earlier expected.
Along with increased demand growth figures, OPEC also revised its world economy forecast to 4.1% for 2010—an increase of 0.2% over last week’s report when the group upgraded its earlier forecast from 2.1% to 3.9%.
The OPEC report came on the heels of similar growth predictions by the US Energy Information Administration which said, “Growth in global oil consumption remains strong” and that “the projected growth in world real GDP (weighted by oil consumption) is 3.9% in 2010.”
Continued upward revisions this year's world oil consumption, particularly for Europe and China, have led to an expected world consumption growth of 2 million b/d for 2010, the EIA said in its weekly Short-Term Energy Outlook.
EIA said it expects this consumption growth to be met in almost equal parts by a 1 million b/d increase in production from OPEC and 1 million b/d increase in non-OPEC supply.
Noting that OPEC left its production targets unchanged at its October meeting, the EIA projected that OPEC crude oil production will increase by 300,000 b/d and 500,000 b/d in 2010 and 2011, respectively.
The EIA expects OPEC members to earn $840 billion from oil exports in 2011, $22 billion more than it forecast a month ago. The EIA also increased its previous forecast of OPEC's oil export revenues for 2010 by $7 billion to $748 billion.
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OPEC raises outlook for global oil consumption in 2010-11