VIENNA, 17 December 2005 — The OPEC oil organization raised yesterday its forecast for growth in oil demand next year based on predictions of stronger-than-expected expansion of the world economy.
World demand for oil will increase by 1.9 percent in 2006 to 84.9 million barrels per day, OPEC said in a report released in Vienna, updating a previous forecast of 84.8 million bpd.
The forecast is a “slight increase” over its outlook issued in November with demand set to increase in all major regions, OPEC said. China is to account for more than one fifth of the increase of 1.6 million bpd.
For this year, the oil organization lowered its estimate for demand by 40,000 bpd to 83.3 million bpd. This figure represents an increase of 1.5 percent compared with demand in 2004.
The forecast was in line with estimates by the International Energy Agency, which had said in its monthly report published on Tuesday that oil demand would grow by 1.4 percent this year.
However, the IEA said that it expected oil demand to grow by 2.2 percent next year to 85.2 million bpd, higher than the forecast by OPEC.
On Monday, the 11 members of the Organization of Petroleum Exporting Countries had met in Kuwait City and decided to leave their production levels unchanged at 30 million bpd, declaring themselves happy with current market conditions and vowing to take action in the event of a fall in prices during winter in the northern hemisphere. OPEC members are currently benefiting from high oil prices, but are also producing at near full-capacity with output at levels unseen for 25 years.
The latest OPEC report said that production in countries outside of the organization would be 51.6 million bpd in 2006, an increase of 1.4 million bpd compared with 2005. OPEC, which supplies about 40 percent of world demand, confirmed that its members had produced 30 million bpd during November.
The average price of oil, calculated by using a basket of 11 types of crude oil around the world, fell by $3.34 in November to $51.29 on average, OPEC said.
However, expectations of a cold winter in the northern hemisphere had led to a rise in prices to $54.44 on Dec. 15, OPEC said, warning that prices could further increase if Europe and United States are hit by a cold spell in the coming months.
On Friday, oil prices fell amid forecasts of warmer weather in the United States, which is the world’s largest consumer of energy.
New York’s main contract, light sweet crude for delivery in January, slipped 29 cents to $59.70 per barrel in electronic trading.
In London, the price of Brent North Sea crude for February delivery shed 36 cents to $59.04 per barrel. The January contract had closed on Thursday up 25 cents at $59.85.