Opec Oil demand to rise in 2014

Opec (Organization of the Petroleum Exporting Countries) announced yesterday that it expects demand for oil in 2014 to be higher than previously estimated.

In its monthly report, the organisation estimated that global demand for oil will increase by approximately 1.14 million barrels a day through the remainder of the year.

This analysis comes on the back of a conflicting assessment delivered by the US government's Energy Information Administration, which cut its calculations this week.

It forecasts that utilisation of oil products will hit 18.89 million barrels a day this year and 18.99 million barrels a day in 2015.

Opec disagrees. One of the reasons given for the rise in demand is down to the fact that established economies all around the world are growing again. Higher demand is a natural by-product of this.

"The global economy will see a gradual recovery in 2014, led by growth acceleration," the report stated. A key determinant for this increase in world oil demand will be the pace of growth in the emerging economies."

However, it noted that in contrast, emerging economies are reporting a slowdown in growth – reflected in foreign exchange markets – which will have an impact on prices.

Most of the demand for oil comes from such countries and as a result of this, their fortunes are heavily tied in the value of oil.

The political turmoil in Ukraine, which has turned into an international situation, has also added to "this year's growth risk", Opec added.

Opec was set up in 1960 to "assert themselves in a market dominated by the major multinational oil companies", the BBC has previously said.

Its members currently produce around 45 per cent of the world's crude oil and it works hard to stabilise prices throughout the world.

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