LONDON: Opec has raised its forecast for world oil demand growth slightly but says fuel consumption may not return to levels seen before the global economic slowdown, even if growth recovers. The Organization of the Petroleum Exporting Countries’ monthly report yesterday raised its estimate for 2010 oil demand growth to 750,000 barrels per day (b/d) compared with its projection of 700,000 last month.

It said most signs pointed towards gradual growth in fuel consumption, but there were risks to the downside. “A potentially weak economic recovery along with higher prices are two main factors that may dampen world oil demand in the coming year,” the report said. Opec said changes in government policy and behaviour could erode demand for fuel, especially in sectors such as transportation.

“Even if the expected economic recovery materialises, it remains to be seen whether demand would be able to return to pre-crisis levels.” Demand for Opec’s own crude would be 28.51m b/d in 2010, up 110,000 b/d from its previous estimate, based on expectations of higher world demand and steady non-Opec supply.

Opec is the second major forecaster to lift its demand estimates this week. On Tuesday, US government agency the Energy Information Administration increased its 2010 world oil demand growth forecast to 1.26m b/d. The International Energy Agency (IEA) will complete this week’s forecasting with its report today, two days after releasing its annual World Energy Outlook.

The IEA, adviser to 28 industrialised countries, said in Tuesday’s report that it expected world oil demand to rise 1 percent a year to 105m b/d by 2030, from around 86m b/d in 2007. Since September 2008, Opec has been holding down its production as the recession eroded demand and pressure oil prices. The group agreed at a September 9 meeting to keep supply curbs unchanged at 4.2m b/d. However, Opec said in its report yesterday that its own production was rising, indicating that a recent climb in oil prices had encouraged members to loosen compliance.

Oil hit a record at nearly $150 a barrel in July last year. It then collapsed to less than $33 last December, but has since recovered to around $80. In October, supply from the 11 Opec members subject to output targets — all except Iraq — rose to 26.52m b/d, Opec said. That cut compliance with output curbs to 60 percent from 61 percent in September.

The surge in prices this year led some within Opec to raise the possibility of an output increase at the group’s December meeting, if the rally continued. A senior Gulf source in China that Opec was still deciding whether to adjust crude output next month but the source so far saw a “balanced” market. Non-Opec supply was expected to rise to 360,000 b/d in 2010, OPEC said, as it edged up its forecast by 10,000 b/d from last month. Opec said it expected Brazil to have the highest oil output growth in 2010.

“The supply picture from a year-on-year perspective is much improved from expectations six months ago,” said Harry Tchilinguirian, oil analyst at French bank BNP Paribas. “Supply performance has surprised to the upside in a number of non-OPEC countries, notably in Russia but also Canada and production in the US Gulf of Mexico,” Tchilinguirian added.

Meanwhile, oil prices steadied as the dollar rebounded from 15-month lows, countering data showing strong demand growth from No. 2 consumer China. US crude futures traded up 9 cents to $79.14 a barrel at 12:39pm EST (1739 GMT), after rising to $80 earlier in the day. Brent crude futures traded up 19 cents to $77.69 a barrel. The dollar rallied back from 15-month lows against major currencies in a technical rebound after selling pressure failed to push the US currency through key levels. “The rebound by the dollar definitely helped pull crude back,” said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc in New York.

Further weakness came as oil and natural gas companies restored operations shut down due to Tropical Storm Ida earlier in the week in the Gulf of Mexico. The US Minerals Management Service reported 43 percent of Gulf of Mexico oil production and nearly 28 percent of natural gas output remained shut on Tuesday. The rebound in the dollar helped counter data from China, which showed crude imports hit the second-highest level in October, showing that oil demand continues a gradual revival from a sharp slowdown in late 2008 and early this year.

Data from industry group American Petroleum Institute released late on Tuesday showed a larger-than-expected increase in US crude oil stockpiles in the week to November 6, as well as gains in gasoline and distillate inventories. Traders were also awaiting US inventory data from the US Energy Information Administration, delayed by one day until today due to the US Veteran’s Day holiday. In Europe, crude oil inventories rose in October as refiners reduced operation rates to match falling demand. Oil product volumes stored in floating storage has risen to 90.3 million barrels and now exceeds total daily oil consumption on a global scale, according to ship brokers ICAP.