LONDON—The Organization of Petroleum Exporting Countries on Tuesday raised its forecast for global oil-demand growth this year, encouraged by stronger-than-expected stimulus-led economic growth in the first half of 2010.

In its monthly oil-market report, the organization upgraded its forecast for world oil-demand growth by 100,000 barrels a day, and its non-OPEC supply forecast for 2010 was also increased by 100,000 barrels a day.
Higher temperatures this summer and during the U.S. driving season bolstered third-quarter oil demand, the report said, but it added that the demand wasn't likely to be as strong as the previous two quarters.
The group expects the phasing out of government stimulus plans within Organization for Economic Cooperation and Development countries ""is the reason behind the easing in the oil-demand growth in the second half of the year.""
The group said despite some market turbulence in 2010, the global economic recovery continues to provide support for oil consumption. While the report signaled it is a little more optimistic about the global economic recovery, it will remain cautious over competition from non-OPEC producers such as Russia. The report indicated that demand for OPEC crude in 2010 is 300,000 barrels a day lower than demand for OPEC crude in 2009.
Saudi Arabia's oil minister Ali Al-Naimi said Monday he is satisfied with oil markets and prices, hinting no action is necessary when OPEC meets to review production on Thursday.
World oil demand is projected to continue increasing throughout next year, sustaining growth of 1.05 million barrels a day—unchanged from the previous forecast.
The group however highlighted several challenges for demand in 2011 such as forecasts for lower gross domestic product figures from a number of countries, which would result in lower energy use. Improved energy efficiency and anticipated increases in use of alternative fuels world-wide are also expected to weigh on global demand, it said. (Source: Wall Street Journal