The Organization of Petroleum Exporting Countries (OPEC) boosted its oil demand estimates for the coming years.
OPEC has also predicted that worldwide oil consumption will increase 5.3 percent to 92.9 million barrels a day in the next four years. OPEC boosted its oil demand forecast by 1.9 million barrels a day through 2015. The new estimate is in part due to emerging Asian economies, and the fast pace of economic recovery seen over the last two years.
OPEC does take into consideration that the recovery is at a fragile stage and there is the possibility of another recession.
According to The Wall Street Journal, OPEC announced on Tuesday that recent signs of economic weakness troubled it. OPEC also said Europe’s debt crisis poses a risk. Still, the medium-term oil demand forecast was raised.
“The recovery has in fact been swifter than expected,” OPEC’s Vienna-based secretariat said, according to Bloomberg Businessweek. “Risks appear skewed to the downside, especially since the sovereign debt crisis in some EU countries seems to be spreading and the world economy slowing down further.”
The increase in the projected demand for world oil means that OPEC will have to produce more oil over the next four years than what was previously predicted. The group will need to increase supplies by 3.6 percent to 31.3 million barrels a day by 2015, according to OPEC.
This demand will be lead by China. China’s demand will increase by 21 percent to 11.6 million barrels a day, from 9.6 million this year.
OPEC is planning ahead and doubling the amount of spare oil supplies in case a crisis is ever to arise. 8 million barrels a day will be set-aside over the medium-term, this is up from 4 million currently.
According to Reuters, “OPEC’s report looks out to 2035, when it expects world demand to reach almost 110 million bpd. Last year’s report stopped at 2030, when it foresaw demand of 106 million bpd.”
OPEC is typically more conservative than other forecasters, like the International Energy Agency (IEA), when predicting oil demand. The IEA will release a long-term energy forecast on Wednesday.
That’s all for now,