OPEC is bracing for weak oil prices in 2010, as demand for its crude falls for the third year in a row. The oil exporters' group predicted that the world would need 28.1 million barrels per day (bpd) of OPEC crude on average next year, down 400,000 bpd from this year. "This represents the third consecutive decline," it said in its July oil market report, released earlier today. "Increasing OPEC spare capacity and growing idle refining capacity should be sufficient to offset any sudden surge in demand or supply disruption in either crude or products. This reduces the likelihood of fundamental factors exerting strong upwards pressure on prices in 2010," the group added.
Demand for OPEC crude peaked in 2007 at 31.2 million bpd. The group's forecast for next year predicts it could drop as low as 27.2 million bpd in the second quarter, which is traditionally the weakest period of the year for oil demand. Nonetheless, that would represent the lowest consumption of OPEC crude in any quarter during the past five years. The group predicted global oil demand would start to recover next year, growing by 500,000 bpd to 84.3 million bpd, while the crude supply from outside OPEC would rise by only 300,000 bpd.
However, OPEC would pump 600,000 bpd more gas liquids and ultra-heavy crude than it did last year ? "non-conventional" oil exempt from in its production quotas ? thereby undercutting demand for its conventional crude. email@example.com