London (Platts)--22Jan2008

OPEC reiterated Tuesday it was ready to boost crude supply to world oil
markets when market fundamentals justified such a move.

Uncertainty about growth in non-OPEC supply--"an important variable in
determining the demand for OPEC crude"--has combined with fears of a global
economic slowdown to result in "an even higher level of uncertainty for the
estimated demand for OPEC crude," the oil producer group's Vienna
secretariat said in its Monthly Oil Market Report.

"As always, OPEC member countries are monitoring market developments
closely and will review the situation at the upcoming meetings of the
conference on February 1 and March 5," the report said. "In the meantime, OPEC
has reiterated its readiness to increase supplies when justified by market
fundamentals."

The report forecast the 2008 call on OPEC crude at 31.52 million b/d,
120,000 b/d higher than the previous estimate but some 307,000 b/d lower than
last year's upwardly revised call of 31.82 million b/d.

For the first quarter of 2008, OPEC sees demand for its crude at 31.99
million b/d, similar to estimated December production of 31.986 million b/d.

World oil demand is now seen at 87.07 million b/d in 2008, slightly up
from the previous report's 87.06 million b/d estimate and 1.3 million b/d
higher than 2007 demand which has been revised upward to 85.77 million b/d
from the previous report's 85.74 million b/d.

"The effect of higher oil prices on consumers might have a moderate
impact [on demand], especially in the OECD," the report said. "However, the
same effect is diluted elsewhere especially in regions in which price
subsidies shield consumers, such as China, India, and OPEC member countries,"
it added.

Non-OPEC supply is forecast to average 50.63 million b/d in 2008, some
110,000 b/d lower than forecast in OPEC's December report which projected a
figure of 50.74 million b/d, and 1.08 million b/d up on 2007's 49.55 million
b/d which has been revised downward from the previous report's 49.62 million
b/d.

"Non-OPEC supply is an important variable in determining the demand for
OPEC crude. A look at the range of forecasts from various sources...shows
considerable uncertainty in the outlook for non-OPEC supply growth for the
first half of 2008, especially for the first quarter," the report said, noting
that first-quarter forecasts ranged from negative growth to positive growth of
well above 1 million b/d.

"Combined with uncertainty impacting demand growth due to rising fears of
a recession in the US and economic slowdown in other regions, this has
resulted in an even higher level of uncertainty for the estimated demand for
OPEC crude," it said.