Increased 2010 oil demand forecast is positive for VLCC and suezmax sectors.
CRUDE oil production from the members of the Organisation of Petroleum Exporting Countries is set to rise 2.5%, the International Energy Agency said yesterday.
The Paris-based organisation increased demand forecast for Opec crude by 300,000 barrels per day to 29.4m bpd yesterday.
This is up from average 2009 production of 28.7m bpd.
Opec increased its own forecast of the demand for its crude this week, which shipbrokers and analysts said would be positive to the very large crude carrier and suezmax sectors.
Opec forecasts demand at 28.7m bpd, lower than the figure the organisation produced in January, which the IEA estimated was 29.1m bpd.
?It is more positive news for tanker owners as the additional barrels will probably go longhaul supporting the VLCCs and suezmax sectors,? head of research at London brokers Gibson Steve Christy said.
?We are even more bullish than the IEA. We forecast Opec production will be 700,000 bpd-800,000 bpd higher than last year.?
There was constraint with the prediction, though, as Opec output fell by 2.5m bpd in 2009 from peak levels seen in 2008 as the global recession hit oil consumption. ?We are forecasting a bounce back, but we are still not back to where we were a couple of years ago ? but it is a move in the right direction,? Mr Christy said.
Imarex Asia said the upward revision on Opec production was positive for the tanker sector, but added that ?any positive impact on VLCC rates will not happen right now but probably a few months down the road?.
The IEA increased its 2010 global oil demand forecast by 170,000 bpd yesterday to 86.5m bpd based on more robust gross domestic product projections from the International Monetary Fund, but non of the additional oil consumption is from Organisation for Economic Co-operation and Development nations.
?The oil demand forecast has been adjusted up for both 2009 and 2010 on the back of higher economic forecasts and yet again higher than expected demand readings from China and other Asian countries,? the IEA wrote in its report.
It expects demand will grow this year by 1.8% over 2009 levels to 86.5m bpd.