Rising world oil consumption next year is expected to deliver another increase in demand for OPEC crude supplies, the cartel's Vienna secretariat said in a report today.
The Organization of the Petroleum Exporting Countries said it saw demand for its crude up 340,000 bpd to an average 27.36 million barrels a day, from 27.02 million bpd in 2004, following an increase of 590,000 bpd this year.
The projection may help underpin the view that OPEC should be able to sustain a bull run on world oil prices into a sixth year following the price crash of late 1998 and early 1999.
US oil prices now are back above $41 despite OPEC's efforts to calm markets by opening up the pumps. Traders worry that with production from the cartel now close to full capacity there is little spare to cover disruptions.
World oil demand in 2005 is projected to climb 1.66 million bpd to 82.56 million bpd, up 2 per cent, after unusually sharp growth of 2.1 million bpd, 2.7 per cent this year, the report said.
The 2005 demand growth estimate is a little lower than the 1.82 million bpd projected by the International Energy Agency, the Paris-based group that advises industrialised energy consuming nations.
OPEC's forecast for the call on its crude is very close to the IEA's projection of 27.4 million bpd. Both are well below OPEC's latest estimate for its own output of 28.92 million bpd for June, when it said production rose 700,000 bpd from May.
That could mean OPEC considers cutting back production at some point to prevent world oil inventories rising too far.
OPEC late last year and earlier in 2005 cut production because it feared sharp inventory builds. But demand forecasts proved too low and the output cuts helped spur prices to record highs of over $42 for US crude.
Demand for OPEC crude is expected to rise sharply in the remainder of this year from the seasonal low-point of the second quarter. The call on OPEC crude should increase 1.24 million bpd in the fourth quarter to 28.17 million bpd on top of 1.4 million bpd of growth in the third quarter, the report said.