OPEC Boosts Forecast for 2012 World Oil Demand

May 10, 2012
Stable U.S. economy and the shutdown of Japanese nuclear power plants cited as drivers of the slight upward revision.

OPEC revised its 2012 world oil demand outlook slightly upward on Thursday, citing a stable U.S. economy and the shutdown of nuclear plants in Japan, which boosted demand.

The Organization of Petroleum Exporting Countries predicted 2012 demand at 88.67 million barrels per day (bpd), up 0.90 million bpd from 2011, in its latest monthly report.

This represented a minor hike from its previous estimate in April which stood at 88.64 million bpd.

"Given the stabilization of the U.S. economy and the shutdown of Japanese nuclear power plants, world oil demand growth has -- at least for the short term -- stopped its declining trend and is showing some growth," OPEC said.

Demand outside the OECD developed countries was higher while those such as India and Saudi Arabia were consuming more than expected, it added.

However, Europe's economic worries continued to hurt demand, OPEC said, warning that high oil prices in the United States could also have a dampening effect on the approaching summer driving season.

"The most important sector [in the U.S.], transportation, continues to consume less oil than it did last year, due mainly to the country's economic activity and high retail prices," the report said.

With economic developments and fuel prices uncertain, "the outlook for U.S. oil consumption for the entire year remains rather pessimistic," it added.

World oil demand could also be impacted by events in Japan, which switched off its last working reactor on Saturday amid a debate over whether the country should retain nuclear power in the wake of the Fukushima disaster last year.

"Should Japan restart its nuclear plants, the country's high oil-usage would slow down dramatically," OPEC said.

The 12-member cartel, which accounts for about a third of global oil supply, pumped some 31.62 million bpd in April, up 0.32 million bpd from March, with members Iraq, Libya, Saudi Arabia, Nigeria, and Angola hiking production.

Iran on the other hand saw output drop, OPEC said, citing secondary sources.

On Thursday, oil prices slipped as a sharper-than-expected U.S. stockpile gain further spooked nervous investors already shaken by worries over the eurozone in the wake of French and Greek elections, analysts said.

New York's main contract, light sweet crude for delivery in June, dipped 12 cents to $96.69 per barrel in the afternoon and Brent North Sea crude for June shed 39 cents to $112.81.

Copyright Agence France-Presse, 2012

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