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OPEC maintains oil outlook, warns of climate policies

by Staff Writers
Vienna (AFP) Nov 4, 2010
OPEC kept its medium- and long-term forecasts for global oil demand relatively unchanged in a new report on Thursday but also spotlighted the impact of environmental policies on the energy market.

By 2015, demand was expected to reach 91 million barrels per day (bpd), according to the cartel's 2010 World Oil Outlook, up from the 90.2 million bpd predicted in last year's report.

While recovery from the economic crisis has been faster than expected, pre-crisis demand levels from 2007 were unlikely to be seen until 2011, the Organisation of Petroleum Exporting Countries said.

By 2030, the cartel forecast demand at 105.5 million bpd.

In both the medium- and long-term, most of that increase in demand will occur in developing countries, it said.

"OECD (developed countries) oil demand falls slightly over the medium-term" and this was "also reflected in long-term projections," OPEC said in its report.

Meanwhile, "over the period 2009-2030, consumption in developing countries increases by more than 22 million bpd. Of the total global oil demand growth in the long-term, 75 percent is in developing Asia," the report said.

OPEC secretary-general Abdalla Salem El-Badri noted that "there are clearly enough resources to meet future demand."

However, climate change concerns and resulting environmental targets present new challenges to oil producers.

"Legislation in some form or other is very likely to move ahead, with knock-on impacts for oil demand, probably oil supply and almost certainly (for) refining."

The potential of such legislation "to reduce demand growth and further increase competition for product markets sends a clear signal that project developers will need to remain cautious about any investment decisions," OPEC warned, although it admitted that the issue of climate change was "pressing."

Poorer countries should not be the ones to pay for their richer partners' century-old pollution, the cartel insisted.

In 20 years' time, and despite booming oil consumption in places like India and China, Annex I countries (Europe, North America, Japan, Australia and New Zealand) will still account for 64 percent of all CO2 emissions since 1900, it noted.

"This underscores the need to fully reflect the historical responsibility in reaching an agreed outcome in the current climate change negotiations," OPEC said, calling for richer countries to make the biggest contribution towards fighting climate change, "given ... their technological and financial capabilities."

On Thursday, world oil prices hit new six-month peaks, reaching 87.59 dollars in New York and 86.05 dollars in London.

El Badri insisted at a press conference to present the 2010 report that "a price at 90 dollars is not an objective."

"I don't think we will see 100 dollars in 2011," he added.

At a meeting last month in the Austrian capital, OPEC ministers repeated that an ideal price per barrel was between 70 and 80 dollars.

El Badri also appeared sceptical Thursday over Iraq's target of pumping up to 12 million bpd within six years, up from its current 2.3 million bdp.

Owing to the country's unrest, Iraq is currently the only OPEC member without a production quota.

"Practically, we don't see any effect on the supply side before 2014," El Badri noted, hinting at no change in OPEC's supply forecasts for the next few years.

The 12-member cartel, which pumps 40 percent of the world's oil, is expected to increase production to 30.8 million bpd in 2015 from 29.3 million bpd this year.

OPEC currently holds 80 percent of world reserves of crude -- or about 1.06 trillion barrels, according to the cartel.

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