Opec raised forecasts for the amount of crude it will need to supply this year because of stronger fuel demand in emerging economies.
The Opec will have to provide an average of 29.8 million barrels per day in 2013, or 100,000 bpd more than it estimated a month ago. The producer group's output in January was 500,000 bpd larger than this, at 30.3 million bpd, according to Opec's monthly market report published today.
"Given some signs of recovery in the global economy and colder weather at the start of this year, the forecast for world oil demand growth in 2013 has also been revised up," Opec's Vienna-based secretariat said. "The bulk of the growth is seen coming from China."
Brent crude futures have advanced 6.7 per cent this year amid signs of economic recovery in the US, acceleration in China, and speculation that Europe has withstood the worst of its debt turmoil. Brent traded at US$118.60 on the London-based ICE Futures Europe exchange today.
Global oil demand will increase by 800,000 bpd, or 0.9 per cent, to 89.7 million bpd, Opec said. That marks an increase of 80,000 bpd from last month's report. China will account for 400,000 bpd of this year's growth.
"If the economic situation continues to brighten up, then there's a good chance of seeing Brent oil prices higher than $128," said Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich.
Opec's 12 members trimmed production last month by 21,000 bpd to 30.32 million bpd, according to the report. That leaves output 320,000 bpd higher than the collective target of 30 million bpd that the group's 12 members reaffirmed at their most recent meeting in December. Saudi Arabia, the group's biggest member and de facto leader, curtailed supplies by 75,800 bpd in January to 9.1 million bpd.
Opec secretary general Abdalla El Badri said on January that there is no need for Opec to restrain production if major economies appear to be struggling and that he does not anticipate any collapse in prices this year.
The organisation kept its estimates for production from outside the group in 2013 unchanged. Non-Opec producers, such as the US, Canada and Brazil, will boost supplies by 900,000 bpd to 53.9 million bpd.
* Bloomberg News
