OPEC lowers its forecast for 2012 global oil demand

The OPEC oil cartel on Friday trimmed its 2012 global oil demand growth forecast for the second time in two months because of worries about developed countries’ economies and higher crude prices.

The Organization of Petroleum Exporting Countries now expects daily demand this year of 88.63 million barrels per day, down from its forecast a month ago of 88.76 million bpd, it said in its March monthly report.

This still represents growth compared to 2011, when demand was 87.77 million bpd, according to OPEC figures that were revised slightly downward.

“The weak pace of growth in the OECD economies is negatively affecting oil demand and imposing a high range of uncertainty on potential consumption growth,” the report said.

“Although U.S. economic data points toward a better performance, the situation in Europe along with higher oil prices has resulted in considerable uncertainties on the future oil demand for the remainder of the year.”

Geopolitical factors, most notably tensions over Iran’s nuclear program and speculation of Israeli military action, sent OPEC’S reference basket oil price 5.1 per cent higher in February to $117.48 per barrel.

The monthly average was the highest since April last year.

Solid economic data in the United States and easing worries over the eurozone debt crisis, coupled with speculative activities in oil futures markets, also served to push the price of crude higher, OPEC said.

The cartel’s 12 members account for about 30 per cent of global crude oil output.

Western powers have imposed a raft of economic sanctions on Tehran in a bid to halt its nuclear program, which they suspect masks a drive to build weapons.

Tehran denies the charge, and has warned that it could close the Strait of Hormuz — a key transit route for global oil supplies — if increased Western sanctions halt Iranian oil exports.

The Islamic republic is the world’s fifthbiggest oil exporter and the second biggest producer in OPEC.

On Tuesday EU foreign policy representative Catherine Ashton said on behalf Britain, China, France, Russia, the United States and Germany that they were ready to hold talks with Iran.

It remained to be agreed where and when the negotiations would be held.

The previous talks broke down in Turkey in January 2011.

The possible resumption comes despite an apparent deadlock between the UN atomic agency and Iran over its nuclear program — which world powers want to be central to the talks — after two visits to Tehran in January and February.