Mideast demand outlook raised

Abu Dhabi: Oil demand in the Middle East is forecast to grow by 300,000 barrels per day (bpd) year-on-year in 2008, the Organisation of Petroleum Exporting Countries (Opec) says in its oil market report for September.

"Transport and industrial fuel demand has increased and is expected to continue to do so for the remainder of the year," said Opec, whose members produce more than 40 per cent of the world's oil.

Opec previously said the Middle East oil demand growth was expected to increase by at least 290,000 bpd during the third quarter of this year on the back of the region's strong econ-omic performance.

The region's oil demand growth was 330,000 bpd in the April-June quarter, a day in the quarter averaging 6.8 million.

"Given the healthy econ-omic performance in the Middle East, oil demand growth should remain strong in both the third and fourth quarters," Opec said in a previous report, adding that oil demand growth this year in developing countries is forecast to reach 800,000 bpd year-on-year to average 25 million bpd.

Lower volumes

Crude oil imports by the US, the world's largest oil importer by volume, averaged 9.97 million bpd in August, 1.7 per cent lower than the previous month and 3.1 per cent lower than in the corresponding period a year earlier, Opec's September report noted.

"The US is still importing lower volumes of crude oil in 2008 compared to 2007. Average crude oil imports for the first eight months of 2008 were 9.87 million bpd, a decline of 1.8 per cent or 179,000 bpd from the same period last year," the report said.

Slowing demand

"This drop is attributed to the overall state of the US economy which has hit sales for almost all products, apart from gasoil, with gasoline and jet fuel sales declining," Opec said.

The US net oil imports declined marginally in July on the back of higher net crude oil and lower net product imports," said Opec.

"The impact of the econ-omic slowdown in the US is being reflected in the lower market price for oil.

"It means the daily oil balance will continue to go up and put increasing downward pressure on oil prices, including Gulf oil," said Dalton Garis, associate professor of Economics at Abu Dhabi's Petroleum Institute.