Apr 23, 2007, 14:47 GMT
Nicosia - Despite an uptick in its view of global economic growth this year, the Organisation of Petroleum Exporting Countries (OPEC) is now expecting overall lower demand in 2007, the Middle East Economic Survey reported Monday.
The Cyprus-based weekly said that OPEC has pegged back the expected call on its crude by 120,000 bpd to 30.28 million bpd this year. The change in the output ceiling was based on higher output by non-OPEC producers and lower overall global demand.
World oil demand growth in March was not as strong as in the previous month, although oil demand picked up worldwide due to the normal winter in North America and strong economic activities in the Middle East, said OPECs Monthly Oil Market Report for April.
OPEC forecast oil demand growth in 2007 at 1.3 million barrels per day, down 40,000 bpd from the previous report.
Late cold weather in the North American region is still driving consumption, the OPEC report noted, and added that U.S. demand growth in March was not as strong as February due to declining fuel oil consumption.
As a result of the cold winter, first-quarter oil demand for North America was revised up by 400,000 bpd to average 25.83 million bpd, representing year-on-year growth of 700,000 bpd.
But, as a result of the warm winter in other regions of the Organisation for Economic Cooperation and Development (OECD), total OECD countries first-quarter oil demand growth was revised down by 300,000 bpd to average 50.05 million bpd, representing a decline of 150,000 bpd.
Elsewhere, Chinese first quarter growth is forecast at 300,000 bpd to average 7.44 million bpd.
On the supply side, non-OPEC oil supply is expected to average 50.72 million bpd in 2007, an increase of 1.26 million barrels per day over 2006 and an upward revision of 83,000 bpd from the last monthly assessment.
On a quarterly basis, non-OPEC supply is expected to average 50.4 million bpd in the first quarter, 50.4 million bpd in the second, 50.6 million bpd in the third and 51.5 million bpd in the fourth quarter.
The outlook for Mexico has been adjusted higher by 50,000 bpd due to actual data for the first quarter of 2007.
Oil supply in OECD Europe is expected to average 5.25 million bpd in 2007, a drop of 120,000 bpd from the 2006 figure and up 49,000 bpd from the previous months assessment.
The revision is mainly due to a change in the U.K. base forecast of 19,000 bpd and other Western Europe, mostly from Netherlands of around 20,000 bpd.
Total OPEC crude oil production average 30.03 million bpd in March, a gain of 37,200 bpd over February, according to secondary sources, the OPEC report said.
OPEC added that the recent run-up in oil prices was the result of geopolitical tensions and that oil inventories remained at comfortable levels.
Despite having fallen to 649 million barrels in the first week of April, product inventories still remained one per cent above the five-year average.
OPEC said that refinery outages and lower imports had been behind the tight U.S. gasoline market, where commercial crude oil stocks stood at 333 million barrels at the start of April, some seven per cent above the five-year average.
The OPEC report said that in contrast to the current tightness in the gasoline market, global crude oil fundamentals appeared to be largely in balance at current OPEC production levels.
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