OPEC forecasts a moderate increase of oil demand in 2010

• The price of oil will remain low next year l Demand for oil produced by OPEC expected to drop for the third year in a row

Alina Vasiescu

The Organization of the Petroleum Exporting Countries (OPEC) predicts a stabilization of oil demand in 2009, followed by a slight increase in 2010, according to a press release published by the cartel in Vienna, yesterday.

"The global demand for oil is stabilizing, matching the evolution of the world economy", the report says, which also expects demand for oil to increase again in 2010. According to the document, "after two years of decline, the global demand for oil, will next year display a moderate growth, of 500,000 barrels a day, to 84.34 million barrels/day".

For the year of 2009, OPEC estimates demand will drop by 1.65 million barrels a day, to 83.84 million barrels a day, which seems to match last month"s prediction (83.80 million barrels/day).

On the other hand, OPEC estimates that the price of oil will remain low in 2010 as well, as demand for the crude produced by the cartel will drop for the third year in a row. OPEC expects to see a global demand for oil of about 28.1 million barrels/day, 400,000 barrels/day below this year"s levels.

The demand for oil reached a peak in 2007: 31.2 million barrels/day.

According to OPEC"s report, demand for oil produced by countries outside the group will increase by 300.000 barrels/day.

"Morgan Stanley": the average price for 2010, USD 85/barrel

Morgan Stanley revised its previous price estimate for oil (USD65/barrel) upwards by 31%, and expects he price of oil traded on the American market will reach an average of USD85/barrel in 2010.

"Morgan Stanley" analysts expect oil demand to bounce back, but also sees output dropping in OPEC countries, as well as in countries outside the cartel.

"It seems global demand will increase if the economy recovers in 2010".

"Morgan Stanley" predicts an average price of USD95/barrel for 2011.