CAIRO — OPEC slightly revised up its oil demand growth forecast for this year and next, noting today that China’s “overheated” economy remains a key driver for energy use in a world still struggling to emerge from its worst recession in decades.
The Organization of the Petroleum Exporting Countries — supplier of about 35 percent of the world’s oil — said the world economy continues to expand at below-average levels. It said a depletion of recession-busting government stimuli and sovereign debt worries in euro zone nations still stoke uncertainty about oil demand and the pace of the global economic recovery.
“Despite some turbulence and setbacks, the global economic recovery continues to provide support for oil consumption,” OPEC said in its October oil market report. But it stressed that oil demand growth next year will be “highly sensitive to China’s energy policies,” even as U.S. demand remains the “wild card.”
“Should China emphasize its energy consumption policy, then this move will negatively affect world energy usage.”
OPEC projected oil demand would hit 85.59 million barrels and 86.64 million barrels per day in 2010 and 2011, respectively. In both years, those figures represented an 80,000 barrel per day upward revision in demand.
The boost in demand for this year was built on stronger-than-expected stimulus-led growth in the first half of 2010, OPEC said. Weighing on demand next year would be lower economic growth figures in some countries, improved energy efficiency and an expected increase in use of alternative fuels.
The inching up of demand amid lingering uncertainty about the global economic recovery will likely factor prominently in the 12-nation producer bloc’s meeting this week in Vienna.
Several of the group’s oil ministers have indicated that they are comfortable with crude’s current price level and it appeared unlikely that the group would change its output quotas. OPEC has left its production quotas unchanged since December 2008, opting to stay the course for fear of jarring prices and derailing the ongoing global economic recovery.
The front-month crude futures contract is around $81 per barrel, well above the $75 per barrel level which OPEC kingpin Saudi Arabia, among others in the group, has indicated was fair for both producers and consumers.
While prices have found support with solid economic growth in China and India, as well as in other developing nations, OPEC said that “speculative activity in the crude futures markets has also continued to play an important role in shaping crude oil price developments.”
“Although prices have remained within a fairly stable range, there is still a need for continued caution, especially in light of the uncertainties influencing the market,” the bloc said. “As always, OPEC stands ready to take the necessary decisions to support oil market stability.”
OPEC also said that non-OPEC supply was projected to rise this year by 1.01 million barrels per day, its highest growth level since 2002. It revised up its non-OPEC supply by 170,000 barrels per day compared to its September forecast, with the uptick based on revisions in supply in the United States and elsewhere.
For 2011, non-OPEC supply was projected to reach 52.59 million barrels per day, an upward revision of 170,000 barrels a day.