OPEC has forecast a 1.2% increase in global oil demand in 2011, with demand for its own crude oil to rise for the first time in three years.

In its latest monthly report, the Organisation of Petroleum Exporting Countries (OPEC) held its forecast for world oil demand growth for 2010 steady at 1.1%, or an extra 950,000 barrels per day (bpd).

And in 2011, growth would pick-up only fractionally to 1.2% or an additional 1m bpd, 'reflecting continued caution about the pace of the global economic recovery,' OPEC said.

Nevertheless, demand for OPEC crude - the 12-country cartel accounts for 40% of the world's oil - was set to see growth of 200,000 bpd, 'the first increase in three years,' it added.

OPEC's latest forecasts differ slightly from those recently published by the International Energy Agency (IEA), the energy strategy arm of the Organisation for Economic Cooperation and Development.

While the IEA also forecast stable demand growth both this year and next year, it put oil demand this year at an average 86.5m bpd and 87.8m bpd next year.

OPEC's forecasts are slightly lower at 85.4m bpd and 86.4m bpd respectively.

Oil fell below $76 a barrel after disappointing US economic data curbed expectations for future demand growth

A US Federal Reserve report showed slowing growth in factory activity in the Mid-Atlantic region, pushing down both oil prices and equities markets.

U.S. crude for August was trading down $1.23 at $75.81 a barrel, after earlier jumping to $77.66. ICE Brent was down $1.03 at $75.74 a barrel.

Source: http://www.rte.ie/business/2010/0715/oil.html