OPEC held its 2011 oil demand growth forecast unchanged on Wednesday, cautioning that while the global oil market currently appears balanced, there is uncertainty about the U.S. economic recovery and Japanese demand.
The Organization of the Petroleum Exporting Countries, the 12-nation bloc that supplies about 35 percent of the world's oil, also said that its members produced almost 29 million barrels per day in April. That represented a 70,000 barrel per day increase over the previous month — a boost that came, in part, to offset the near halt in output from Libya.
In its latest market report, OPEC forecast global oil demand growth for 2011 at 1.4 million barrels per day, a 20,000 barrel per day upward revision from its estimate the prior month. The U.S. Energy Information Administration, the Energy Department's analytical arm, a day earlier issued a similar forecast for the year's demand growth.
OPEC said that while stronger than expected economic growth in China was supportive of demand, worries about the continuity of the U.S. economic rebound and the fallout on oil demand from Japan's devastating earthquake and tsunami were keeping "oil demand estimates in an adjustment mode and ... imposing a downside risk for the year's forecasts."
"These economic uncertainties are clouding market needs for the remainder of the year," OPEC said.
The disruption in Libyan output has stoked fears in the oil market, pushing prices up well past $100 per barrel for weeks even as the group argued that the market was well supplied. Even as global oil prices rallied sharply, the producer group gave little indication that it was ready to revise its output quotas when it meets on June 8 in Vienna. OPEC has left its quotas unchanged for over two years.
As the violence in Libya escalated, battering oil output from the OPEC member, others in the group — most notably Saudi Arabia — stepped in to offset the lost volume. Riyadh later scaled back its output to below 9 million barrels per day again amid lackluster demand for the blended crude it produced in a bit to accommodate refiner appetite for Libya's light sweet oil.
Despite the surge in prices over the past couple of months, the group has argued the gains are largely linked to market speculation and not on supply-demand fundamentals.
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