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VIENNA: The OPEC oil producers' cartel held its forecast for modest growth in world oil demand this year on Wednesday, but warned the slow pace of economic recovery was clouding the outlook.
"The slow pace of the recovery in the world economy in 2010 is putting pressure on oil demand," the Organization of Petroleum Exporting Countries said in its February report.
"As a result, US demand is a key uncertainty for this year. Non-OECD regions will be the sole contributors to global demand growth in 2010."
World oil demand in 2010 was forecast to projected to grow by 0.8 million barrels per day (bpd) to average 85.1 million bpd, "in line with the previous forecast," the report said.
"The global recovery is proceeding apace... but the strength of the upturn in 2010 is still uncertain and regionally uneven," OPEC found.
It was primarily uncertainty about the pace of the US economic recovery that was "creating some downward risk on the country's oil demand this year."
Cold weather managed to increase demand for heating oil and fuel oil, but declining demand for diesel and gasoline resulted in negative growth in January.
An anticipated increase of around 1.0 per cent in US oil demand this year "may not materialise."
Indeed, there were "several obstacles" to US demand growth, the main risk being the recovery path of the US economy.
China's strong economic growth last year contributed to "a moderate rise in oil demand," the cartel continued.
And this year, Chinese oil demand was forecast to grow by 4.5 per cent.
"Nevertheless, the government is keen to curb the nation energy use, an aim incorporated in its current five year plan. However, slower-than-expected growth in the global economy could impact China's exports and industrial production, dampening the need for oil."
Furthermore, internal measures to slow down the economy could also affect oil demand in China.
At the same time, positive signals - such as projected strong growth in new car sales in China - appeared to be supportive for oil demand growth this year.
"In light of the significant contribution of the US and China to economic growth and oil consumption, the economic and demand uncertainties in these countries will continue to have an important impact on both the world economy and the oil market," OPEC said.
"Therefore, ongoing developments should be monitored closely in the months ahead."
- AFP/yb
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