Vienna, January 21:

Worldwide demand for crude is expected to rise by 1.9 per cent in 2006 to 84.8 million barrels per day (bpd), Organisation of Petroleum Exporting Countries (OPEC) said in a report.

This estimate is down slightly from a December prediction by the OPEC that foresaw demand rising to 84.9 million bpd. The report, published shortly before a January 31 meeting of the 11-member cartel, came as Iran called for a reduction in oil production this year.

OPEC’s estimate for world oil demand in 2005 has been revised to 83.2 million bpd, with growth down from December 2005 estimates but up by 1.1 million bpd or 1.4 per cent compared to 2004. OPEC said the economy would still be strong in 2006 and worldwide growth, estimated at 4.3 per cent, would lead to higher oil consumption in all major regions except for the part of Europe west of Russia. Demand in industrialised nations is expected to increase by 700,000 bpd, or 3.2 per cent, while demand in China is to jump by six per cent, making China a consumer of about a fourth of the world’s crude.

“It remains unclear whether this solid start to the year will be maintained throughout 2006,” the report said however, adding “supply fears in West Africa and rising geopolitical tensions in the Middle East” were putting pressure on crude prices. OPEC said the US economy was “a particular cause for concern as any retrenchment by the American consumer could have a significant impact on Asian growth.”

The average price per barrel for oil, as determined by OPEC’s ‘reference basket’ was $50.64

in 2005, up by 40 per cent from the previous year, according to the OPEC report. “Despite unseasonably warm weather in the northern hemisphere, the basket continued its upward trend in the first half of January to average $56.82” per barrel, the report said.

OPEC, which supplies about 35 per cent of the world’s oil consumption, said it had produced an average 29.82 million bpd in December compared to 29.99 million bpd the previous month.

Prices top $68

NEW YORK: Oil prices topped $68 a barrel on Friday as a purported threat to the US by al-Qaeda fuelled the jitters of investors nervous about potential supply disruptions in Iran and Nigeria. Traders said the record high reached on August 30 in New York — $70.85 a barrel — was in sight. There was a ‘strong possibility’ of new records by the end of next week. — AFP

US expection

WASHINGTON: The US government expects the OPEC oil-producing cartel will ‘do the right thing’ and plug any crude shortfalls should Iran be slapped with sanctions over its nuclear drive. Energy Secretary Samuel Bodman said that from administration contacts with the major oil producers, “my sense is that we will find that the suppliers will continue to make material available to the markets”. — AFP