Vienna: OPEC has slightly increased its estimate for world oil demand growth in 2007 despite current economic turmoil, the cartel said on 14 August.
“World oil demand growth in 2007 is forecast at 1.3 million barrels per day (bpd), or 1.5%, a tad higher than the estimate for last month, reflecting additional oil needs for Japanese power plants,” the Organization of Petroleum Exporting Countries said in its monthly report.
UN inspectors said last week that the world’s largest nuclear power plant in Japan will be closed for months, after an accident there on 16 July.
OPEC noted that “over the last four weeks, prices for benchmark WTI (West Texas Intermediate — the US benchmark) crude oil have exhibited extreme volatility,” as the world economy has experienced stock market and other economic fluctuations.
“There is no doubt that the above uncertainties have clouded the outlook for oil demand,” OPEC said.
“The more bearish economic trend which has materialized in recent weeks could negatively impact demand growth in the second half of the year,” the report said.
It said US economic problems such as the “recession in the housing sector, in particular the subprime mortgage market” have precipitated “fears of a global economic slowdown.”
In addition, “OECD oil demand, affected by the warm winter, led to a decline in oil consumption in both Europe and the Pacific.”
But “non-OECD oil demand was as strong as expected. Booming economies pushed oil demand up by 3.5% or 1.22 million bpd, year-on-year, in the first half of 2007. China, the Middle East and India accounted for the largest share of oil demand,” OPEC said.