1st LD Writethru: Oil prices gain on positive demand forecast

Oil prices surged Tuesday as Organization of Petroleum Exporting Countries (OPEC) raised demand forecast in its monthly report.

World oil demand in 2015 is now projected to rise at a slightly higher 1.18 million barrels per day (mb/d), compared to growth of 0.96 mb/d in the previous year, said OPEC in the report released on Tuesday.

The slight upward revision to the 2015 growth figure mainly reflects expectations of an uptick in oil requirements in the OECD America.

Demand for OPEC crude in 2015 is expected at 29.3 mb/d. This follows a slight upward adjustment from the previous month and represents a gain of 0.3 mb/d over the estimate for 2014 of 29.0 mb/d.

In April, OPEC crude oil production increased by a marginal 18, 000 thousand barrels per day to average 30.84 mb/d.

Non-OPEC oil supply growth in 2015 is expected to grow by 0.68 mb/d, compared to an increase of 2.17 mb/d in the previous year.

The geopolitical tensions of Yemen also help to support the oil prices. Yemen borders top oil producer Saudi Arabia. The geopolitical worries of Yemen overshadowed the negative effect of supply glut.

Light, sweet crude for June delivery jumped 1.5 dollars to settle at 60.75 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery rose 1.95 dollars to close at 66.86 dollars a barrel. Endite