Economic hopes rise as oil demand seen to grow while dangers ease

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The outlook for the global economy appeared to brighten as OPEC, the cartel of oil-producing nations, predicted the world will consume more oil this year than previously thought.

The forecast, which serves as a rouch proxy for expected economic activity, came as credit rating agency Moody’s said the dangers facing for the global economy had shrunk in recent months.

OPEC, or the Organisation of the Petroleum Exporting Countries, cited the better than expected growth seen at the end of last year, as it said it will have to provide 29.8m barrels of oil a day in 2013, up 0.3pc on its January estimate. The group’s 12 members account for about 30pc of global crude oil output.

“Given some signs of recovery in the global economy and colder weather at the start of this year, the forecast for world oil demand growth in 2013 has also been revised up,” OPEC said, predicting that China would drive the growth.

Separately, Moody’s said that there are “encouraging signs” that growth could strengthen in the world’s largest three economies - the US, China and Japan.

Overall, it expects headline GDP growth in the Group of 20 advanced economies to come in around 1.4pc in 2013, followed by 2pc growth in 2014, representing little change on its central forecasts from November (Xetra: A0Z24E - news) .

However, Moody’s said that the “most notable change” to its global outlook is that downside risks to growth appear to have significantly diminished.

“In particular, the full scale of the potential disruption to the US economy from the so-called fiscal cliff was avoided, financing stresses in the euro area have somewhat eased, and there are increasing signs that key emerging markets will manage to avoid an overly sharp slowdown in growth,” it said.