OPEC cautions about pace of US economic recovery

(AP) — OPEC on Wednesday raised questions about how fast the U.S. economy will be able to bounce back, but it is sticking to its forecast for worldwide oil demand for now.

The Organization of the Petroleum Exporting Countries said in its monthly market report that an unclear picture of the pace of the U.S. economic recovery has the potential to push its oil demand estimates lower. The United States is the world's largest oil consumer, responsible for nearly a quarter of global demand.

"U.S. demand is a key uncertainty for this year," the 12-member bloc said.

OPEC said the U.S. economic rebound depends on the level of continued government monetary and fiscal support, and whether that aid translates into a stronger economy and lower unemployment.

The producer group cautioned that there is also "some uncertainty" about increased demand in China, the world's No. 2 consumer, where it expects demand will rise 4.5 percent this year. OPEC noted that a slower-than-expected improvement in the global economy could hurt China's exports and lower the need for oil.

The bloc left its global forecast for oil demand growth broadly unchanged from its previous forecast. It expects demand to increase by about 800,000 barrels a day this year, with daily consumption averaging 85.1 million barrels.

"The global recovery is proceeding apace, led by manufacturing, but the strength of the upturn in 2010 is still uncertain and regionally uneven," the group said.

OPEC has not adjusted its members' production quotas since it slashed daily output by 4.2 million barrels per day in a rapid series of cuts in late 2008.

Those reductions helped push oil prices up from the low-$30s in the wake of the economic meltdown to the mid-$70 a barrel range now — a level several key OPEC members argue is fair for both producers and consumers.

OPEC's members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. All except Iraq are expected to adhere to mutually agreed production levels, though many do not.

OPEC is scheduled to meet to discuss production levels again in Vienna in March 17.