The Organization of Petroleum Exporting Countries (OPEC) expects oil demand to increase modestly next year as the world economy gradually improves and energy demand from developing countries grows.

In its monthly report, OPEC forecasts that demand for crude will grow by 1.2% or just over a million barrels per day in 2011.

The oil market is set to remain well supplied as capacity of crude oil production increases, OPEC said.

Although it sees oil demand growth coming from the developing countries of China, India, Latin America and the Middle East, world economy recovery depends on the US.

“Any further delay in the US’s economic recovery will lead to a downward revision in world oil demand, OPEC said in a statement.