LONDON: The Organization of Petroleum Exporting Countries said it will need to pump more crude than previously forecast this year after cutting its outlook for production of natural gas liquids.

OPEC, which produces about 40% of the world's oil, predicts members will need to produce 28.94 million barrels a day to satisfy demand in 2010. That's about 190,000 barrels a day more than last month's projection. Still, OPEC expects demand for its crude this year to be lower than last year after it increased its estimate for 2009 by 200,000 barrels a day.

"Even taking into account the uncertainty regarding demand for OPEC crude, current OPEC production is likely to exceed market needs," the Vienna-based secretariat said in the report. "This, along with the steady rise in spare capacity in both the upstream and downstream, provides a further cushion for the projected increase in oil demand in the second half of the year."

OPEC will meet March 17 in Vienna to decide production quotas. Shokri Ghanem, chairman of Libya's National Oil Corp., said this week that "no new decision" about production levels is expected at the meeting. Projected demand levels are still "much less" than OPEC's current production, meaning stockpiles could increase, the group said today.

The producer group increased its forecast for worldwide oil consumption in 2010 by 120,000 barrels a day to 85.24 million barrels a day. That represents growth of 880,000 barrels a day from 2009, 80,000 barrels a day more than it forecast last month. Consumption growth is driven entirely by developing economies and will remain sensitive to the pace of global economic recovery, according to OPEC.

'Questions Remain'

"Questions remain as to how long governments will be able to afford supporting their economies," OPEC said in the report. "Should this support diminish, then world oil demand would of course be impacted."

The increase in projected demand is offset by stronger production from countries outside the group. Non-OPEC supply is expected to climb 410,000 barrels a day this year to 51.43 million barrels a day. That increase is 80,000 barrels a day more than OPEC forecast last month.

The revision to the amount of crude OPEC thinks it will have to pump next year, the so-called call on OPEC crude, is driven by a drop in the projected production of its own natural gas liquids.

NGL and non-conventional oil production is estimated to average 4.87 million barrels a day this year, 230,000 barrels a day less than forecast last month. Natural gas liquids, which can be made into fuels of petrochemical feedstocks, aren't included in the organization's supply quota of 24.845 million barrels a day.

The International Energy Agency, which advises oil- consuming nations, will release its own monthly report on March 12. OPEC's 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system.