OPEC revises down growth of 2005 oil demand

The Organization of Petroleum Exporting Countries said it had revised down its estimate for growth in world oil demand this year, but warned that another spike in prices was possible, AFP reported Monday

Updating previous forecasts, the 11-member oil cartel said in its October oil report that global demand would increase on average by 1.2 million barrels per day this year compared with 2004, putting demand 1.4 percent higher than last year.

OPEC had previously estimated that demand would be 1.7 percent higher this year, but it said that consumption had softened owing to the sustained high prices in the wake of hurricanes Katrina and Rita in the United States.

On Monday, oil traders were worried about further hurricane threats to US production, sending oil in New York 1.18 dollars higher to 63.81 dollars per barrel, while the price in London gained 1.17 dollars to 60.65 dollars.

The price of crude hit an all-time record of 70.85 dollar per barrel at the end of August after Hurricane Katrina devastated production and refining capacity in the Gulf of Mexico.

Despite the retreat in prices since then, OPEC warned that global markets remained under tension and that prices could rebound in the event of further shocks to the industry.

It referred to the loss of refining capacity in the US and strikes in the sector in France, also stating that global economic growth of 4.2 percent would sustain demand for oil.

For 2006, OPEC maintained its previous estimate for growth of oil demand at 1.8 percent, with daily consumption expected to reach 84.7 million barrels.

OPEC said that its 11 members, which jointly provide more than a third of global oil supplies, had produced 30.34 million barrels per day on average during September, an increase of 130,000 barrels a day from August.

Additional output had come from Iraq, where an extra 68,800 barrels per day were pumped in September compared with August, as well as Kuweit, Saudi Arabia and the United Arab Emirates, OPEC said in the report.

Noting a decline in the growth of production in non-OPEC countries, OPEC said that these producers, led by Russia, would produce an average 50.3 million barrels per day this year, slightly less than a previous estimate of 50.4 million bpd.(*)