Opec sees no let-up in 2006 oil demand

The world will need Opec 's oil even more this winter and next year as high oil prices have failed to slow galloping economic growth, the producer group said on Wednesday.
Opec bumped up its world oil demand forecast for 2006 in its monthly report, and also said demand for its own oil in the fourth quarter of this year would be 276,000 bpd higher than previously expected. That is higher than cartel output of 30 million bpd.
The Organisation of the Petroleum Exporting Countries will meet on December 12 in Kuwait to decide on production policy. For months running Opec has been pumping nearly flat out, filling the world's storage tanks to prevent a fuel crunch and price spike this winter.
Now-bulging US stockpiles and balmy weather have cut the cartel's reference price to $50.01, its lowest level since the end of March 24. US oil, which trades $6-$7 above the Opec basket, has lost $14 since hitting a record $70.85 in August.
What Opec officials call "more realistic" price levels may be sufficient to sustain booming demand for petrol.
The cartel has raised its world demand growth forecast for 2006 to 1.52 million barrels per day (bpd). The increase of 0.05 million bpd over the previous month's estimate lifts 2006 demand to 84.8 million bpd.
"These higher figures are supported by vigorous preliminary growth data from developing countries, a brighter outlook for the world economy - particularly for the US and OECD Pacific countries - and a rebound in Chinese apparent demand," the report said.
Global demand this year was expected to grow 1.2 million bpd, unchanged from last month's report, to 83.3 million bpd.
The report cut its projection of supplies from non- Opec - the likes of Russia, Mexico and Norway - for the third quarter by 195,000 bpd to 49.77 million bpd and in the fourth quarter by 191,000 bpd to 50.24 million bpd.
Supplies from non- Opec in 2006 are expected to average 51.61 million bpd, an increase of 1.4 million bpd over 2005.
At its meeting in September, Opec agreed to offer all its spare capacity, mostly in the hands of Saudi Arabia, from October 1 for three months - but had found no takers. But that could change if Opec's demand projection is realised.