Opec 2010 demand growth forecast edges up

London: The Organisation of Petroleum Exporting Countries (Opec) raised its forecast for world oil demand growth slightly in a report yesterday, but said fuel consumption might not return to pre-crisis levels even if the economy recovered further.

Opec's monthly report raised its estimated for 2010 oil demand growth to 750,000 barrel per day (bpd) compared with its estimate of 700,000 last month.

It said most signs pointed towards gradual growth in fuel consumption, but there were risks to the downside.

"A potentially weak economic recovery along with higher prices are two main factors that may dampen world oil demand in the coming year," the report said. "Even if the expected economic recovery materialises, it remains to be seen whether demand will be able to return to pre-crisis levels." World crude demand in 2007 was around 86 million bpd.

Opec said demand for its own crude would be 28.51 million bpd in 2010, up 110,000 bpd from its previous estimate, based on its expectations of higher world demand.

Meanwhile, oil firmed above $79 yesterday as a 15-month low in the dollar diverted investors' focus from fundamentals, with weekly US government inventory data being delayed by one day till today.

Analysts said strong Chinese demand and factory output also supported the market but the gain was capped by weak demand elsewhere and a relatively quick recovery of the US oil industry after storm disruption. US crude futures were trading 35 cents up at $79.40 a barrel by 1057 GMT. Brent crude futures rose 43 cents to $77.93.

"Only the dollar may push oil prices around. The Chinese manufacturing data was good, which is bullish. We are still in a hurricane aftermath, which is bearish," Andy Sommer, senior oil analyst with EGL Group, said.