OPEC Cuts 2012 Oil Demand Forecast

Economic weakness in Europe and the United States and higher oil prices led OPEC to cut its 2012 forecast for growth in global oil demand on Thursday.

The Organization of Petroleum Exporting Countries now expects daily demand this year of 88.76 million barrels per day, down from its forecast a month ago of 88.90 million bpd.

The new forecast also represents an increase of 0.94 million bpd from the level seen in 2011, according to revised OPEC data.

"Waning OECD economies are negatively affecting the oil market and imposing a considerable range of uncertainty over the short term," the report said in reference to the Organization for Economic Cooperation and Development.

It pointed in particular to concern over US growth prospects and potential fallout from the Eurozone debt crisis.

In Europe, "the severity of the situation has lessened, but many challenges remain," OPEC noted.

The cartel's 12 members account for about 30 percent of global crude oil output and they expected demand to increase mainly in China, India, the Middle East and Latin America.

Another factor that could curb demand worldwide however was higher oil prices.

"Firming retail petroleum prices are expected to have a negative impact on oil demand across the globe," OPEC said.

"The transportation and industrial sectors are the ones most affected. The use of oil in both sectors is slowing noticeably worldwide," it added.

Crude prices edged higher in London trade Thursday on hopes that protracted talks over a Greek debt deal were set for a conclusion, analysts said.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in March, gained 60 cents to $99.31 a barrel and Brent North Sea crude for March was up 38 cents to $117.58 around midday.

The price for a basket of benchmark crude oils used by OPEC reached 111.76 dollars a barrel in January, the highest monthly average since April.