OPEC cuts 2006 world oil demand growth estimate by 110,000 b/d

London (Platts)--17Mar2006

OPEC Friday cut its estimate of world oil demand growth this year by 110,000 b/d to account for weak demand in the US during the first part of the year and a gloomier outlook in Asia.

In its latest monthly oil market report, OPEC said it now expected world oil demand to rise by 1.57 million b/d this year, 110,000 b/d less than it had previously predicted.

The estimate has been cut to "to account for the persistent year-on-year contraction in US demand during January and February as well as a more pessimistic view for growth in non-OECD Asia," OPEC said.

This growth in demand would be an increase from last year's figure of around 1 million b/d but only around half of the level seen in 2004.

In outright terms, OPEC now expects world demand for oil to average 84.51 million b/d in 2006, a downwards revision of 130,000 b/d from its previous monthly report.

On the supply side, OPEC has trimmed its forecast of non-OPEC oil production for 2006 to 51.46 million b/d, down 70,000 b/d from the previous report. Year-on-year growth in non-OPEC output is now expected to average 1.35 million b/d, 30,000 b/d less than previously.

As a result of the downward revision to demand estimates, OPEC cut its estimate for the 'call' on its own oil production to 28.43 million b/d, down from a previous projection of 28.49 million b/d and less than the cartel is currently producing.

OPEC itself pumped 29.713 million b/d of crude in February, it said in the report, up from 29.553 million b/d in January. The increase was largely due to a rise in Iraqi production to 1.773 million b/d from 1.551 million b/d.

Production by the group's ten remaining members nominally bound by a collective output ceiling of 28 million b/d slipped to 27.94 million b/d from 28.002 million b/d in January.

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