In its May Oil Market Report, the cartel's monthly assessment of trends, it notes that full-year global oil demand is now expected to total 86.95 million barrels per day (bpd), against previous expectations of 86.97 million bpd published in its April report.

OPEC analysts wrote that, "Demand in North America is forecast to be flat (over 2008), while oil demand in other OECD regions is expected to decline due to weakening transport fuel demand in the second quarter."

Furthermore, the cartel expects oil demand to experience typical seasonal low consumption in the second quarter of the year. It added that this year's summer driving season is not likely to show its normal annual growth due to the anticipated weaker gasoline demand in the U.S.

OPEC expects offsetting effects mainly from non-OECD countries, with the burgeoning economies of China and India at the top of the pile alongside the Middle East and Latin America, all of which are expected to see a growth in oil consumption.

Demand for OPEC (only) crude is seen at 31.8 million barrels in 2008 down from 32.0 million barrels last year. The cartel also trimmed its outlook for non-OPEC supply this year, with the average increase in supply expected at 0.7 million bpd. It made downward revisions to oil production in Australia, Brazil, Denmark, Mexico, New Zealand, Norway, Russia and UK.

OPEC believes this could be partially offset by increased production in India, Chad and Syria. Overall non-OPEC supply is expected to average 50.18 million bpd in 2008; a downward revision of 106,000 barrels per day from last month's assessment.

Concurrently, OPEC said its own crude production for April dropped by 393,000 barrels month-over-month to 31.70 million barrels.

By Gaurav Sharma, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it