QUITO: The Organization of Petroleum Exporting Countries (OPEC) meets in the Ecuadoran capital Saturday with the goal of keeping quotas as they are, despite a recent rise in the price of oil and a forecast increase in demand. The meeting will be the last before Ecuador hands OPEC's rotating presidency to Iran for 2011 - the first time in 36 years the Islamic republic will be the temporary leader of the organization. Stimulated by a weak US dollar and a cold snap in Europe and parts of the United States, the price of a barrel of crude has broken the psychologically important $90 barrier for the first time since October 2008. Oil prices dipped Friday as traders feared a slowdown in China's economic activity as it struggles to fight soaring inflation. New York's main contract, light sweet crude for January, lost 58 cents to close at $87.79 a barrel. Brent North Sea crude for delivery in January dropped 51 cents to settle at $90.48 a barrel in London trade. In Vienna, OPEC raised its forecast for oil demand in 2010 because of global economic recovery and cold weather in Europe Friday, a day before OPEC ministers meet on production levels. "World oil demand growth in 2010 is now forecast at 1.5 million barrels per day, representing an upward revision of about 0.2 mbd," the Organization of Petroleum Exporting Countries said in its monthly report. "OECD oil demand is turning out to be stronger than expected, supported by stimulus driven economic activities," it said, putting 2010 daily demand at an average of 85.93 mbd. "Cold winter in Europe has also strengthened heating oil consumption in December," said the report. The organization held its forecast for world oil demand growth in 2011 steady at 1.2 mbd, but with the increase in the 2010 figure, it now expects demand to average 87.1 mbd next year. The International Energy Agency said Friday that world oil demand was currently showing a year-end spurt, but said that growth in demand should decline next year to 1.3 mbd. The IEA said the OPEC meeting was unlikely to change production quotas and looked set to reach a "quick agreement" to roll over existing targets despite the "unexpected jump in global oil demand" in the second half of this year and "sharp price increases since they last met Oct. 14." But OPEC "may come under pressure to increase supplies to the market in the new year if prices continue their relentless rise," the IEA said. The 12-member organization, which pumps more than 35 percent of the world's oil, has maintained its official production target unchanged at 24.8 million barrels a day since Jan. 1, 2009, when it agreed to a hefty cut aimed at boosting oil prices that had tumbled to about 30 dollars a barrel because of the financial crisis. In November, OPEC revised upward its world oil demand growth estimates for both 2010 and 2011 amid cautious optimism about the global economic outlook. OPEC said it was penciling in world oil demand growth of 1.32 million barrels per day (bpd), or 1.6 percent, to 85.78 million bpd for the whole of 2010, compared with 1.3 percent previously. And in 2011, oil demand would then increase by a further 1.17 million bpd or 1.4 percent to 86.95 million bpd, instead of the previous estimate of 1.2 percent, the cartel said in its monthly bulletin. Looking ahead to next year, “optimism about the outlook for world economic activity is growing to some degree,” OPEC said. OPEC currently holds 80 percent of world reserves of crude - or about 1.06 trillion barrels. Most members consider a price of between $75 and $85 a barrel to be adequate.
