* Raises demand growth for 2nd month, cites developed
* Says events in Ukraine have added to growth risk
* OPEC raises Feb output, pumps more than forecast demand
* IEA report due on Friday
(Adds details, quotes from para 4)
By Alex Lawler
LONDON, March 12 World oil demand will increase
more than expected in 2014, OPEC said on Wednesday, raising its
prediction for a second straight month as economic growth picks
up in Europe and the United States.
The view on oil demand growth from the Organization of the
Petroleum Exporting Countries, source of a third of the world's
oil, contrasts with that of the U.S. government's Energy
Information Administration, which on Tuesday cut its forecast.
In a monthly report, OPEC said global demand will rise by
1.14 million barrels per day (bpd) this year, up 50,000 bpd from
its previous forecast. It also raised the 2014 projection for
global demand for OPEC's crude.
"While many challenges remain, the expected improvement in
the global economy is also resulting in higher oil demand," said
the report from OPEC's Vienna headquarters.
OPEC cited further signs of strong oil demand in the world's
top consumer, the United States, as well as a stabilising rate
of demand contraction in Europe - where oil use has been held
back for years by weak economies.
But the group also sees an increasing chance of slowdown in
emerging economies - the source of much of the world's oil
demand growth. Concern over China was weighing on currencies
closely linked to commodities on Wednesday.
"This rising risk of a slowdown in growth in the emerging
economies has been mirrored in the foreign exchange markets in
recent months," OPEC said. "Recent developments in Ukraine have
added to this year's growth risk."
According to secondary sources cited by the report, OPEC
raised its own output to 30.12 million bpd in February, as a
ramp-up in Iraqi exports outweighed disruption to Libyan
shipments and lower Saudi Arabian output.
The stronger global demand outlook is leading to slightly
higher demand for OPEC oil in 2014. OPEC expects the demand for
crude pumped by its 12 members to average 29.70 million bpd, up
100,000 bpd from last month's report.
While OPEC will welcome signs of higher demand for its
crude, its market share is still under pressure from rising
supplies of non-OPEC oil, such as U.S. shale. OPEC's 2014 supply
and demand figures point to a 420,00 bpd build-up in global
inventories should OPEC keep pumping at February's rate.
Following the reports from the EIA and OPEC, a third closely
watched update on supply and demand is due on Friday from the
the International Energy Agency.
(Reporting by Alex Lawler; Editing by Anthony Barker)