Stronger Rise in Oil Demand Seen

The Energy Department increases its estimate of consumption, which could affect whether OPEC cuts crude output.

U.S. and world oil demand growth in the second quarter is expected to be stronger than previously forecast, the Energy Information Administration said Tuesday, which could affect OPEC’s decision on whether to cut oil output during the period.

In its monthly forecast, the Energy Department’s analytical arm increased its estimate for U.S. oil demand growth during the April-June period by 180,000 barrels a day to 20.91 million barrels and raised its projection for total world oil demand growth in the period by 200,000 barrels a day to 83.8 million barrels.

The forecast rise in oil consumption could influence the Organization of the Petroleum Exporting Countries as it meets again in March to review its crude production levels for the second quarter, when petroleum demand is usually weaker.

When OPEC oil ministers last met Jan. 31, cartel member Venezuela said it expected that the group would cut its oil output by as much as 1 million barrels a day at the March meeting.

Meanwhile, Saudi Arabia’s petroleum minister said Tuesday that the world’s top oil exporter would continue to bolster its output capacity to quell global shortages but had “concerns” about the Bush administration’s call to cut America’s addiction to Middle East oil.

Reuters