OPEC sees economic slowdown to ease prices, oil rises to $93 a barrel

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LONDON, Dec 14 (Agencies): OPEC said Friday there were risks an economic slowdown could worsen in 2008 and forecast that weaker growth and easing political tension could take the heat out of near-record oil prices.
OPEC, in its December Monthly Oil Market Report, estimated world economies will grow by 4.8 percent next year, down from 5.2 percent in 2007, and said there were "considerable downside risks" to the outlook.
"Prospects for 2008 are increasingly clouded by the expected slowdown in the U.S. economy and other OECD regions, and by continued turbulence in financial markets in the wake of the deepening subprime mortgage crisis," the report said.
"The improving geopolitical situation and slowing economic outlook should help to further ease the pressure on the market."
OPEC also forecast world oil demand would grow by 1.3 million barrels per day next year, steady from the previous estimate and much lower than some projections.
The group, which pumps more than a third of the world's oil, is more pessimistic about demand than the International Energy Agency, which earlier on Friday raised its forecast for demand growth next year to 2.1 million bpd.
Meanwhile another report adds, Oil prices rose Friday on forecasts that oil demand would grow faster than previously expected next year with new buyers in the market.
The International Energy Agency raised its forecast for world oil demand growth in 2008 by 170,000 barrels a day, a rise of 2.5 percent, compared with 2.3 percent in its previous report. It said overall demand was now expected next year to reach 87.8 million barrels a day, Dow Jones Newswires reported.
The security watchdog for the Organization for Economic Cooperation and Development, or OECD, said its upward revision was based on an expected increase in demand for ethane and other petrochemical feedstocks in the Middle East, notably Saudi Arabia.
The forecast assumed continuing robust oil demand growth in non-OECD countries, where subsidies protect people from the impact of high oil prices, and normal winter weather.
On Friday, light, sweet crude for January delivery rose 79 cents to $93.04 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.
The contract fell $2.14 to settle overnight at $92.25 a barrel. It had jumped $4.37, or 4.9 percent, on Wednesday to its highest close since Nov. 27 on unexpected declines in U.S. crude stockpiles.
Prices fell more than $2 a barrel in the previous session, as investors sold futures contracts on expectations of an ongoing price slide.
After a gain of almost 5 percent on Wednesday, two causes of the midweek surge in oil prices evaporated Thursday when the U.S. dollar strengthened and Exxon Mobil Corp. said a Texas refinery suffered no production outages from a fire.
In London, January Brent crude added 78 cents to $92.90 a barrel on the ICE Futures exchange.
Some analysts said fresh buying by large funds also was helping push prices higher.
Crude supplies fell 700,000 barrels during the week ended Dec. 7, according to a weekly inventory report from the U.S. Energy Department's Energy Information Administration. Analysts surveyed by Dow Jones Newswires had expected a 100,000 barrel increase.