Opec raises estimate for oil demand growth in 2008

Opec on Friday raised its estimate for world oil demand growth in 2008, owing to fast-growing demand for transport and industrial fuel in developing countries, but kept unchanged its forecast for world oil demand this year.
"The coming holiday season is keeping the kerosene jet fuel demand healthy worldwide," the Organisation of Petroleum Exporting Countries said in its December monthly report.
"Total world oil demand growth in 2007 is forecast at 1.2 million bpd (barrels per day) or 1.42 percent," the report said.
Nevertheless, world oil demand next year was projected to rise by 1.3 million bpd or 1.54 percent next year, a slight upward revision from the cartel's previous forecast of 1.53 percent.
Increasing oil demand was driven largely by developing countries, which accounted for 80 percent of demand growth, Opec said.
Looking back at price developments this year, the cartel said that 2007 was characterised "by the departure of the price from the normal seasonal trend in the second half of the year."
Between end-August and mid-November, prices jumped by almost 25 dollars a barrel and the Opec's own reference basket reached a record high of 91.91 dollars a barrel on November 21.
"In addition to geopolitics, the main factors behind the upward trend were the ongoing US dollar weakness, persistent refinery outages and weather-related supply disruptions," Opec said.
If global economic growth was projected to reach 5.2 percent this year, the outlook was not quite so rosy next year.
"Increasing downside risks have not affected the overall strong growth performance in the global economy in 2007, estimated to have achieved 5.2 percent," the report said.
"However, prospects for 2008 are increasingly clouded by the expected slowdown in the US economy and other OECD regions, and by continued turbulence in financial markets in the wake of the deepening subprime mortgage crisis."