Opec bumped up its world oil demand forecast for 2006 in its monthly report, and also said demand for its own oil in the fourth quarter of this year would be 276,000 bpd higher than previously expected. That is higher than cartel output of 30 million bpd.
The Organisation of the Petroleum Exporting Countries will meet on Dec. 12 in Kuwait to decide on production policy. For months running OPEC has been pumping nearly flat out, filling the worlds storage tanks to prevent a fuel crunch and price spike this winter.
Now-bulging US stockpiles and balmy weather have cut the cartels reference price to $50.01, its lowest level since the end of March 24. US oil, which trades $6-$7 above the OPEC basket, has lost $14 since hitting a record $70.85 in August. What Opec officials call more realistic price levels may be sufficient to sustain booming demand for petrol.
The cartel has raised its world demand growth forecast for 2006 to 1.52 million barrels per day (bpd).
The increase of 0.05 million bpd over the previous months estimate lifts 2006 demand to 84.8 million bpd.
These higher figures are supported by vigorous preliminary growth data from developing countries, a brighter outlook for the world economy particularly for the US and OECD Pacific countries and a rebound in Chinese apparent demand, the report said. Global demand this year was expected to grow 1.2 million bpd, unchanged from last months report, to 83.3 million bpd.
The report cut its projection of supplies from non-OPEC the likes of Russia, Mexico and Norway for the third quarter by 195,000 bpd to 49.77 million bpd and in the fourth quarter by 191,000 bpd to 50.24 million bpd.