The Organization of the Petroleum Exporting Countries in its monthly market report for February found prices were moving up. This, said OPEC, was attributed to a "bullish" U.S. economy and "revived geopolitical tensions in the Middle East, which helped to boost the risk premium in crude oil prices."
It added, however, that demand for oil would drop from 1 million barrels per day to 900,000 barrels per day for 2012. The cartel said some of its optimism was offset for uncertainty in the economic viability and the credit downgrades for some European countries.
"Recent economic setbacks have pushed the global demand forecast lower," OPEC said. OPEC said its members need to provide around 30 million bpd to the global market for the year, a decline in the forecast from the January report.
OPEC in its report made no mention of the European move to place an embargo on crude oil exports from Iran, one of the organization's leading members. Saudi Arabia had said it was interested in a balanced oil market, providing assurances to Seoul that it could do without Iranian crude oil.
The International Energy Agency last year ordered member states to release strategic crude oil reserves to make up for shortages from war-torn Libya. The IEA said it didn't see any physical disruptions in the oil market because of the Iranian saber rattling.
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