London: Evidence of an impending upturn in the world economy appears to be gathering but recovery will be slow and gradual, Opec said on Tuesday, as the group left its world oil demand forecast for 2010 unchanged.
World oil demand was expected to fall 1.56 million barrels per day (bpd) in 2009 before rising 500,000 bpd in 2010, the Organization of the Petroleum Exporting Countries (Opec), which supplies over a third of world oil, said in a monthly report.
“Due to the weak situation in the world economy, demand growth in the first half of the year fell to the lowest level since the early 1980s,” the group’s report said.
Demand for Opec’s crude will average 28.06 million bpd in 2010, down 460,000 bpd from 2009, the group said. That was a smaller decline than its 480,000 bpd previous assessment.
The report pointed to a further reduction in Opec’s compliance with agreed supply curbs. Opec, excluding Iraq, raised output in August to 26.33 million bpd, up from 26.20 in July, it said.
That reduced compliance with output targets to 64% from 67% in July, according to Reuters calculations based on Opec figures. Members are often encouraged to relax adherence to supply limits when oil prices are rising.
Oil prices neared $70 a barrel on Tuesday, close to the year highs, having more than doubled from below $33 in December, supported by optimism over economic recovery and Opec supply cuts.
Supply from non-Opec countries was also expected to rise in 2010, boosted by higher output from the United States, Russia, Norway and Azerbaijan and revisions to historical data.
Non-Opec supplies were forecast to rise by 420,000 bpd in 2010, 100,000 bpd less than previously estimated.
The group said there had been a steady accumulation of oil product stocks as the weak world economic environment sapped demand for middle distillates, which are used to produce diesel, heating oil and jet fuel.
Oil product stocks now represent more than 60% of the total oil oversupply compared to only 20% in January, the report said.