nation Organization of the Petroleum Exporting Countries (OPEC) slashed its estimate for oil demand this year and said it expected sales to stagnate next year, in a forecast Tuesday blaming global economic uncertainty for cutting into the world's appetite for crude. Updating last month's forecast, the 12-nation Organization of the Petroleum Exporting Countries said that it expected demand to be up by nearly 1 million barrels a day this year over last. That projected increase will be 180,000 barrels a day less than its previous estimate, it said. Oil prices fell below $85 per barrel early Tuesday after OPEC cut its estimate for world oil demand for this year and said it expects no growth in demand for 2012. However, at the close of trading, oil prices recovered and rose for the fifth straight session in New York Tuesday. New York's main contract, WTI light sweet crude for November, rose 40 cents to close at $85.81 a barrel. In London, Brent North Sea crude for delivery in November jumped $1.78 to settle at $110.56 a barrel, reversing losses early Tuesday. For next year, OPEC's monthly forecast said that estimated growth in world oil demand will fall to a daily 1.2 million barrels. That would leave the global appetite for crude at just over 88 million barrels a day for 2012. "Uncertainty in the world economy has dimmed the picture for 2011, particularly in the OECD region," said the monthly report referring to the major industrialized nations. But it added that domestic policies in China and India - the two developing countries traditionally driving demand - also are expected to contribute to the downward revision in word demand growth. The Chinese plan to reduce fuel use, while India's decision to raise retail prices is also "expected to play a major role in dampening oil consumption in the coming year." OPEC, which produces around a third of the world's crude, said estimated demand for its own product remains unchanged for this year at 29.9 million barrels a day - around 100,000 barrels a day higher than last year. For next year, however, forecast demand for OPEC oil will stagnate at this year's levels, representing a downward revision of around 100,000 barrels a day, it said. Oil prices remain volatile, driven by concerns over Europe's financial crisis and conflicting economic signals from the United States, the world's biggest crude consumer. The price of the 12-crude basket of the Organization of OPEC rose $1.45 Monday to reach $104.67 per barrel, the organization said Tuesday. The price was $103.22 pb on Friday, the OPEC said in its bulletin Tuesday. OPEC's bulletin said that the basket average price for the year came to $77.45 pb. Kuwaiti Export crude is one in a basket of 12, produced by OPEC members, along with Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE), and Merey (Venezuela). Investor optimism was bolstered after German Chancellor Angela Merkel and French President Nicolas Sarkozy said Sunday they would finalize a "comprehensive response" to Europe's debt crisis by the end of the month. Concern that a possible debt default by Greece could lead to a banking crisis had sent crude to a 12-month low of $75 last week. But traders now expect European leaders to agree to pump more capital into the region's banks, which would likely limit the possible damage of a default. "A week ago, traders and investors saw Europe melting down," Cameron Hanover said in a report. "But Germany and France have agreed to contain the Greek contagion.
