UAE Says Demand for OPEC Oil May Drop in '10

Demand for OPEC crude may drop by 100,000 bpd this year as stockpiles are higher than the five-year average and the global economy is weak, the United Arab Emirates oil minister said.

Demand for crude produced by OPEC could drop this year after last year falling by 2.3 million bpd to 28.7 million bpd, Mohamed Al-Hamli said in a speech in Abu Dhabi.

“Oil price stability has been achieved despite weakness in the global economy and unfavorable market fundamentals,” he said. Prices are fluctuating between US$70 and US$80 a barrel, “a level that is acceptable to producers, which at the same time does not dampen prospects for economic recovery.”

OPEC meets on17  March 2010 in Vienna to decide whether to adjust production quotas for the first time since it agreed a record output cut in December 2008 as fuel demand tumbled during the worst global recession since World War II.

World demand fell by 1.4 million bpd last year, the minister said. This year, it is forecast to grow by 800,000 bpd. Stocks in developed nations are around 93 million barrels above the five-year average, or almost 60 days of forward cover, he said. - Bloombergg