VIENNA: OPEC on Friday left unchanged its estimate for growth in world oil demand this year, arguing that while high oil prices and mild winter weather would brake demand in major industrialized countries, the market for crude would be strong elsewhere.
World oil demand in 2008 is forecast to grow by 1.2 million barrels per day (bpd) to average 86.97 million bpd, unchanged from our previous estimate, the Organization of Petroleum Exporting Countries said in its March monthly report.
Slow world economy and warm winter in some parts of the OECD (Organization for Economic Cooperation and Development) regions dented demand for winter products. Fluctuating weather patterns caused oil demand in the OECD to decline in February, the report said.
The halt in economic activities in China over the Chinese New Year holiday season last month did not affect the country s oil consumption. In fact, power shortages caused independent power generators to kick in, which led to excessive diesel demand, OPEC continued.
Oil demand in other non-OECD countries – such as the Middle East, India, and Latin America – was strong, offsetting the weak OECD oil demand during February.
Nevertheless, it would primarily be the weather that would affect oil demand this year, OPEC said.
Although the slowdown in the world economy, along with high retail petroleum prices, is considered a major variable in oil demand this year, the weather will play a significant role in oil demand as well. Strong non-OECD oil demand is expected to boost total world oil demand by 1.3 million bpd in the first quarter.
OPEC also left unchanged its estimate for world oil demand growth in 2007, when it was projected to have risen by 1.2 million bpd or 1.4 percent to average 85.77 million bpd.
Strong economic growth in non-OECD countries accounted for all of last year s oil demand growth, OPEC said. – AFP
