OPEC Holds Demand Outlook Steady

The Organization of the Petroleum Exporting Countries said it expects oil demand to grow by 1.4 million barrels per day (bpd) this year, around steady on its previous forecast and also in line with IEA figures.

But its monthly oil market report also said higher oil prices could have "a slightly negative impact" on transport fuel use worldwide.

Non-OPECsupply was forecast to grow by 0.6 million bpd this year, an upward revision of 0.1 million bpd from last month's report, OPEC said, while demand for OPEC crude this year would average 29.9 million bpd.

That marks an increase of 0.4 million bpd from last year and an upward revision of 0.1 million bpd from OPEC's last assessment.

Brent crude vaulted to a two-and-a-half-year high above $127 on Monday, driven by concerns about the possible spread of supply disruption after unrest shut in output from OPEC member Libya.

OPEC reiterated comments by oil ministers that the market was still adequately supplied and said inventories remained above the historical trend.

Volatile oil markets therefore did not reflect fundamentals of supply and demand, OPEC said, and echoed reassurances from the leading exporter, Saudi Arabia.

"The market can be assured that in the months ahead, the Organization of the Petroleum Exporting Countries will continue its long-standing role of supporting oil market stability," it said.