The Organization of Petroleum Exporting Countries raised its 2011 forecast for global oil demand as industrial consumption recovers in developed countries including the U.S. and Germany.
OPEC expects oil demand to grow by 1.2 million barrels a day to 86.95 million barrels next year, according to the producer’s monthly report today. That’s 120,000 barrels a day more than last month’s forecast.
“Petrochemical and transport sectors are dominant in world oil demand growth in 2011,” OPEC said in the report. “North America, Europe and the Pacific region have shown strength in oil consumption.”
Oil in New York rose to the highest level in two years today after crude inventories declined in the U.S., the world’s biggest oil user, according to a government report yesterday. Recent strength in U.S. automobile and truck sales will bolster gasoline consumption in the fourth quarter, OPEC said.
Global oil demand has been rising since the third quarter of 2009 led by developing economies outside the Organization for Economic Cooperation and Development including Brazil and China, according to the Paris-based International Energy Agency.
Growth in oil demand next year is still strongest in China, Latin America and the Middle East, according to today’s report. China accounts for over a third of next year’s growth in demand in volume terms, OPEC said.
Chinese oil-processing rates rose to a record last month, according to government data released today.
Rising OECD Demand
The 12-member producer group also raised its forecast for global oil demand this year, highlighting increased usage in South Korea and Germany. Consumption will be 85.78 million barrels a day, up 190,000 barrels on last month’s estimate.
“Consumption in the OECD has outpaced expectations as a result of the stronger-than-expected economic activities, supported by various stimulus plans,” the report said.
OPEC currently accounts for about 40 percent of the world’s oil supply. That proportion is expected to rise to 50 percent by 2035, the IEA said this week. The group will need to pump more crude to meet next year’s increase in demand, OPEC said.
Demand for the producer group’s crude is estimated at 29.2 million barrels a day in 2011, according to the report. That’s up 400,000 barrels a day on the group’s previous estimate.
Non-OPEC supply will increase by 360,000 barrels a day to 52.52 million barrels in 2011, with Canada, India and Oman driving growth, OPEC said. That forecast is down by 70,000 barrels from the previous report.
Ministers representing OPEC members including Saudi Arabia and Iran met last month in Vienna, agreeing to leave current production quotas unchanged and calling for improved compliance with the output limits.
The group effectively reversed the supply cuts announced in 2008 as rising prices encouraged members to flout their output limits. Compliance with production quotas agreed to in 2008 was 51 percent last month compared with a revised 55 percent for September.
OPEC’s other members are Algeria, Angola, Ecuador, Iraq, Kuwait, Libya, Nigeria, Qatar, the United Arab Emirates and Venezuela. Iraq is not bound by production quotas.