OPEC raises forecast for 2011 world oil demand growth

"Given the latest upward revision in world GDP (gross domestic product), world oil demand growth is forecast at 1.23 million barrels per day (bpd) averaging 87.3 million bpd in 2011, 50,000 bpd higher than last month's estimate," the Organization of Petroleum Exporting Countries said in its latest monthly bulletin.

"The magnitude and the speed of the world economic recovery will have a remarkable impact on world oil demand this year," it said, adding: "Weather in the northern hemisphere is gaining momentum and has slightly affected the heating and fuel oil demand."

In terms of sector, the petrochemical and transport industries would be the main driver of growth in world oil demand, the cartel stated.

And for the second year in a row, demand in industrialised countries -- grouped together under the umbrella of the Organization for Economic Co-operation and Development or OECD -- had "not only stopped its decline but incurred extra oil usage."

Nevertheless, public debt in a number of European economies and continued application of rigorous state tax policies on oil "are some of the factors which could impose future declines in European oil consumption during 2011."

In the Pacific region, oil demand in Japan and South Korea would be the engine behind the region’s growth this year.

It is the fourth month in a row that OPEC -- whose 12 member countries pump out 40 per cent of the world's crude -- has upgraded its 2011 oil demand forecast.

Oil prices have risen in recent weeks, with Brent crude passing the 99-dollar mark for the first time in two years in London trading last week.

OPEC secretary-general Abdalla Salem El-Badri blamed the latest surge on speculation.

"There were a few technical problems, such as the oil pipeline leak in Alaska. But speculators have seized the opportunity and prices have shot up," El-Badri said in an interview with the Austrian financial daily Wirtschaftsblatt.

"We'll have to wait and see. Prices have only been this high for the past two or three weeks."

OPEC had no interest in prices that were "either too high or too low," the cartel chief continued.

"Oil prices must be high enough to allow for investment. On the other hand, we don't want excessively high oil prices to put the brakes on global economic growth," El-Badri said.

He rejected suggestions that OPEC should raise its production to help bring down prices.

"No one would buy the oil," he said. "I can assure you: if customers approach our member states and ask for more oil, they will get it. But we can't simply raise the production quotas without there being a buyer.

"We have to see how the market develops," El-Badri continued.

"We're monitoring the markets and OPEC will intervene to stabilise the market if the market is unbalanced. But OPEC will not intervene against speculators," he said.