VIENNA - The Organization of Oil Exporting Countries (OPEC) on Friday revised upwards its world oil demand growth estimate for 2010 to 1.2% but urged caution in predicting future trends.
"Given stabilized oil demand in the US, the world oil demand growth forecast is revised up by 0.1 million barrels per day (bpd) to show growth of 1.05 million bpd or 1.2%," the cartel said in its monthly report.
Total demand for 2010 was now expected to reach 85.5 million bpd, up from 84.46 million bpd in 2009.
The cartel warned however that a slower economy in the second half of the year, caused by a phasing out of fiscal stimulus, would likely affect demand.
"Looking to the second half, the pace of economic growth is projected to slow, not only in OECD (developed countries) but also across most emerging and developing markets, indicating that oil demand growth will remain moderate.
"There is need to be cautious about forecasting oil demand for the remainder of 2010," the report said.
"Moreover, other factors such as government policies could impact the growth in demand," it added, citing plans by China to meet environmental targets by the end of the year which could cut into oil demand in the country, the world's second largest consumer after the United States.
"For the whole year, oil demand growth is expected at around 1.0 million bpd, lower than the pre-recession annual average of around 1.7 million bpd," OPEC noted.
"Next year, the situation is not expected to be much different," it added.
World oil demand growth for 2011 was likely to remain around 1.0 million bpd as forecast in OPEC's previous report -- "a level of growth that appears more realistic going forward, given the large uncertainties."
Claims that oil demand could soon again reach pre-recession levels "appear to be exaggerated," it added.
Oil demand in OECD countries grew in the second quarter of the year for the first time since 2007, according to the OPEC report.
In 2010 and 2011, however, growth will likely come from non-OECD countries such as China and India, as well as the Middle East and Latin America, it said.
The United States will remain a "wild card" next year, the cartel warned, noting that "any further delay in the country’s economic recovery will of course lead to a downward revision in total world oil demand."