MercoPress. South Atlantic News Agency

OPEC again cuts 2008 global oil demand estimate

The Organization of Petroleum Exporting Countries cut its 2008 global oil demand forecast for a fifth month as record fuel prices curb consumption. Oil demand this year will rise 1.1 million barrels a day to 86.88 million barrels, OPEC said in its monthly oil market report today.

The forecast is about 60,000 barrels a day lower than last month's estimate of 86.95 million barrels a day. Saudi Arabia has said it will produce an extra 300,000 barrels a day in June to curb prices that reached a record 139 US dollars a barrel. Slowing demand and higher Saudi Arabian production will cause a higher-than-average global stockpile increase in the third quarter, said OPEC, whose members supply more than 40% of the world's oil. The trend will continue in the last three months of the year, when inventories typically decline, the report said. "This clearly demonstrates that the market is amply supplied and that claims that the recent surge in prices is due to a supply shortage are unjustified," the report said. "Economic developments combined with current oil price levels are beginning to have an effect on oil demand." Saudi Arabia, the world's top exporter, will host a June 22 meeting in Jeddah between oil producers and consumers and hedge funds to discuss prices. The country is likely to announce a "sizeable" increase in production at the meeting, the Middle East Economy survey reported today. OPEC's report cut its estimate of 2008 oil supply from outside the 13-member group by 50,000 barrels to 50.13 million barrels a day on lower production in the UK, Australia, Sudan and Kazakhstan. Total output from non-OPEC producers will increase by 700,000 barrels a day this year, the report said. Total OPEC production averaged 32.2 million barrels a day in May, an increase of 343,200 barrels a day from April on higher production from Saudi Arabia and Iraq. Saudi output increased by 150,000 barrels a day in May and Iraq's by 94,000 barrels a day, the report said.