The Organization of the Petroleum Exporting Countries (OPEC) said demand for crude oil would grow by 1.12 per cent, only 0.06 percentage points higher than the previous assessment, global oil demand would grow more than expected in 2010.
In April, the IMF predicted global economic growth of 4.2 per cent in 2010, up from a January forecast of 3.9 per cent.
In its monthly oil market report the group said it expects global crude consumption this year to grow by about 950,000 barrels a day, a rise of about 50,000 barrels a day from its report last month.
Much of the increase was tied to an upgrade in Chinese demand forecasts as double-digit gross-domestic-product growth there in the first quarter led to a year-on-year demand increase of 800,000 barrels a day in March for China.
Oil prices dropped on Tuesday in line with falling equity markets and as OPEC held its demand forecast steady.
However, the 12-nation organization, which accounts for about 40% of the 86 million barrels of oil used globally each day, warned that although the global “economic recovery shows signs of improving momentum, important risks remain,” which could affect demand later this year.
In particular, OPEC said “the crisis in Greece demonstrates the extent of the challenge in the euro zone.”
OPEC total crude oil production averaged 29.25 mb/d in April, according to secondary sources, indicating a minor increase of 0.01 mb/d from the previous month. All OPEC Member Countries crude production experienced a minor change in April compared to the previous month, with Iraq indicating the highest decrease and Nigeria showing the highest increase. OPEC crude oil production, excluding Iraq, stood at 26.91 mb/d in April, up 0.06 mb/d from the previous month.
OPEC is the first of three major forecasters to release its monthly report and it has the lowest forecast for demand growth. The U.S. Energy Information Administration (EIA) is scheduled to issue its report later on Tuesday and the International Energy Agency (IEA) follows on Wednesday.
The report from OPEC raised its forecast for demand for its crude by 40,000 bpd from last month to 28.85 million in 2010, but this is still 100,000 bpd lower than last year.
OPEC also said that members’ production continued to rise in April, reducing compliance with their individual output targets.
Members with output quotas, all except Iraq, met only 51 percent of the targeted 4.2 million bpd cuts in April, down from 52 percent in March, according to Reuters calculations based on the latest OPEC data.