OPEC Expects Further Increase in Oil Prices
LONDON -(Dow Jones)- High oil prices haven't damped demand or spurred extra production, forcing the world to rely more on OPEC's oil, the producer group said Monday.
The Organization of Petroleum Exporting Countries revised up its forecasts for the "call" on OPEC by 400,000 barrels a day in the fourth quarter to 28.51 million b/d.
September production increased 432,000 b/d to 30.12 million b/d, OPEC said in its monthly report.
OPEC is pumping nearly flat out with only Saudi Arabia having any significant spare capacity. But prices continue to soar to new highs because the extra oil is of grades harder to refine into the heating oil and gasoline now needed.
OPEC also said it expected prices to rise in the short term.
OPEC said its earlier estimates of how much other producers such as Africa, or the former Soviet Union would pump were too high.
World oil demand is continuing to surge ahead through the end of the year despite record high prices.
The bullish effects of strikes in Nigeria, instability in Iraq and trouble in Russia have been amplified by speculators, OPEC said.
"Together these upward pressures have driven the US light-sweet benchmark crude WTI to over $54 a barrel and could lead to further increases in the short term."
For 2005, lower than anticipated economic growth and the impact of high prices on consumption will slow down oil demand growth by 130,000 b/d to 1.61 million b/d, OPEC said.
Chinese demand which fed this year's bull run is set to slow with President Hu Jintao cooling the economy and the government pushing oil-saving projects like coal-fired and nuclear generators and hydroelectricity, OPEC said.
OPEC said these measures might significantly reducethe country's oil consumption.
Nonetheless, tightness will remain next year because of continued demand for sulfur-low, lighter crudes.
"There remains major upside risks for the market, risks that require urgent attention," OPEC said.