By Brai Odion-Esene

WASHINGTON (MNI) - Although global demand is increasing once more, the uncertainty surrounding the economic recovery, as consumers are weighed down by employment concerns, offers little evidence oil prices will go above $80 or $90 a barrel in the second half of 2010, a major energy think tank said Monday.

In its monthly oil report for February, the London-based Centre for Global Energy Studies said global oil demand is growing again, driven by apparent surging demand in China and boosted by a protracted and widespread spell of cold weather across much of the Northern Hemisphere.

The outlook remains far from certain, the report said, as the cold weather is unlikely to last much beyond the end of the current quarter and there is little sign of underlying growth in OECD oil demand.

It noted that China's crude oil demand has been encouraged by a massive government economic stimulus, guaranteed refining margins and spending on infrastructure, but Asian product surpluses are also appearing and moving into the Atlantic Basin, depressing refining margins and reducing runs there.

"In such an environment, it is difficult to see much support for higher oil prices, either from fundamental or financial factors," the CGES said.

While China's January crude oil imports were up 1 million barrels per day year-on-year, the report said, they were down on more recent months. Soaring refinery runs have "virtually eradicated" the country's net product imports, which fell from more than 500,000 bpd in the first half of 2009 to just 80,000 bpd over the last three months.

Even though new pipelines, refineries and storage facilities will all require oil to fill them over the course of 2010, sustainability of the high Chinese growth rates will ultimately depend on a revival in its exports, which will require economic recovery in its key markets. the report said.

That may remain elusive, though, as long as consumers worry about their jobs and future living standards.

"In this environment, the CGES can find little to support the more bullish forecasts of oil prices exceeding $80/bbl, or even $90/bbl later in the year, which are being made by some of the investment banks," the report said.

NYMEX WTI crude was trading at about $80 Monday, in a range $79.47 to $80.51.

The CGES warns that market fundamentals may also weigh on oil prices, as supplies from non-OPEC producers and OPEC NGLs and other liquids are expected to rise by nearly 1 million bpd in 2010, offsetting most of the expected demand growth.

Global inventories will rise sharply in the second quarter, despite heavy maintenance, after a modest fall in the first, the CGES said.

And despite the toll economic woes have exacted on OECD oil demand, the CGES stressed that trends towards the more efficient use of energy in vehicles and buildings were already emerging, spurred on by the soaring oil prices that preceded the crash.

This, it predicted, "will continue to undermine the translation of economic recovery into oil demand growth in the developed countries."

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