VIENNA - WORLD oil demand is 'settling down' this year in line with the global economy and is expected to 'turn positive in 2010,' the Opec oil producers' cartel said on Tuesday.

'World oil demand is settling down in line with the current world economic situation,' the OrganiSation of Petroleum Exporting Countries wrote in its latest monthly report.

And 'after two consecutive years of negative growth ... world oil demand is expected to turn positive in 2010. (It) is projected to show a moderate increase of 0.5 million barrels per day (bpd)' or 0.59 per cent to 84.34 million bpd.

For this year, Opec estimated that demand would contract by 1.65 million barrels per day (bpd) or 1.93 per cent - only a marginal downward revision from its earlier forecast.

In its previous monthly bulletin released in June, Opec had been pencilling in a contraction of 1.62 million bpd or 1.89 per cent for 2009.

Next year, 'the bulk of the recovery in oil demand is projected to be seen in the second half of the year when the global economic rebound strengthens,' the report continued.

Growth was expected to come mostly from developing economies such as China, India, the Middle East and Latin America.

Demand for industrial fuel was expected to remain weak, with transportation fuels making up most of the increase.

Oil demand in the United States, the world's biggest oil consumer, 'will remain as a wild card in 2010 given the uncertainty about the pace of the economic recovery,' Opec cautioned.

'Oil prices, taxes, and removal of retail price subsidies will also impact demand and could lead to further downward revisions.' Nevertheless, if the US were to experience a stronger and more rapid economic recovery than currently expected, 'then oil demand could see higher growth,' it added. -- AFP