The Organization of Petroleum Exporting Countries said Tuesday it revised up its forecast for world oil demand in 2009 and 2010 as the global economy continues to show signs of recovery but warned that sustained government spending to support growth was difficult to maintain, in particular in advanced economies.
"With the U.S. oil demand bouncing back from a steep historical decline, the forecast for 2009 world oil demand growth has been revised up by 200,000 barrels a day to now show a contraction of 1.4 million barrels a day," OPEC said in its widely-watched monthly market report.
World oil demand in 2009 is now seen averaging 84.2 million barrels a day on the back of rising demand from North America, the Organization for Economic Cooperation and Development, or OECD, Pacific region, India and the Middle East.
OPEC also revised up global oil demand growth in 2010 by 200,000 barrels a day. Next year's demand growth is now expected to reach 700,000 barrels a day to average a daily 84.9 million barrels amid a "slow and weak" improvement in the world economy as financial markets stabilize.
"The second quarter is now seen to mark the bottom of the recession, a view that has been reflected in comments by world leaders and policy-makers at the G20 summit in Pittsburgh, as well as at the annual meeting of the IMF/World Bank in Istanbul," OPEC said in the report.
However, OPEC warned that the pace and strength of the recovery is still not clear as improvements so far were driven by higher government spending, which will be difficult to sustain.
"The current level of fiscal stimulus will be difficult to sustain as government spending is creating large deficits, particularly in the advanced economies," OPEC said. Growth is not expected to pick up sufficiently in developed countries without further stimulus, it added.