OPEC raises world oil demand projection

Global oil demand will rise more quickly than expected in 2010 but the slow pace of economic recovery could continue to cloud the outlook, the Organization of the Petroleum Exporting Countries (OPEC) said. In its monthly oil report, OPEC said that world demand will rise by 900,000 barrels per day (bpd) in 2010 or 1.1% to average 85.2 million bpd, up 100,000 bpd from its February projection. OPEC also pointed to a further rise in production from its members in defiance of agreed output limits. Oil demand has been highly dependent on the world economy, supported by government-led stimulus plans, OPEC said. "These stimulus plans have already done a great job of jump-starting many sectors of the economy, including energy," the cartel said. However, questions remain as to how long governments will be able to afford supporting their economies, it added. "Should this support diminish, then world oil demand would of course be impacted," OPEC said.

OPEC - PC's idea doesn't work for us

Oil cartel OPEC on Monday rejected India's call for regulating crude prices through a price band, saying the market was the best judge and forecast prices climbing to USD 170 a barrel on summer demand in the US.

"Producing and consuming nations never agree on any price... They never agreed with (OPEC) price band (that operated between 2000 and 2005). Then we did away with the price band... We are never going to agree (on the price band)," OPEC president Chakib Khelil told reporters on the sidelines of the World Petroleum Congress here.

Stung by high oil prices driving inflation to 13-year high of 11.42 percent, Finance Minister P Chidambaram had, at a meeting of energy ministers in Jeddah last week, asked the Organisation of Petroleum Exporting Countries (OPEC) to operationalise a price band mechanism wherein crude prices move within a specified range.

The speculative premium has been put by New Delhi at USD 60 a barrel. Khelil, however, said: "We (should) let the oil market decide."

India has blamed speculators for the rise in crude prices that have touched an all time high of USD 142.99 a barrel, but western oil firms pinned it on demand-supply mismatch.

"I don't think you can blame the speculators for the high oil price," Jeroen van der Veer, chief executive officer of Europe's biggest oil producer Royal Dutch Shell Plc, said at the 19th WPC.

While maintaining that there was more than enough oil to meet global demand, Khelil said the pressure on Iran, the second-largest producer in the cartel, as well as a falling dollar may drive prices to USD 170 a barrel.

OPEC head concerned about oil market volatility

OPEC head Abdalla Salem el-Badri on Wednesday said he was worried about volatility in the oil market as prices soared through the historic 130 dollars level for the first time.

"The Secretary General expressed concern about the volatility that has characterised the market in recent times," the Vienna-based cartel said in a statement from Caracas, where el-Badri met Venezuelan President Hugo Chavez as part of a weeklong working visit to OPEC members Venezuela and Ecuador.

Following his meeting with Chavez, el-Badri said, "The crude oil market remains well-supplied, with (developed world) stocks increasing above their five-year average.

"OPEC will continue to strive to bring stability to the oil market," the statement said, noting that el-Badri "also called on other stakeholders in the industry -- consumers, producers, investors -- to cooperate to find a lasting solution to the volatility."

El-badri stressed that OPEC remained committed "to working for the stability of the international oil market, noting that the current high oil prices are not influenced by market fundamentals, as the market is well supplied.

"OPEC will continue to monitor global oil markets regularly and is ready to act if and when necessary to ensure market stability and adequate supplies," the statement added.

OPEC has repeatedly said that the market is well supplied and that record prices reflect speculative investment activity rather than underlying supply and demand conditions.