StatoilHydro ASA, the world’s largest offshore oil and gas operator, said there’s a risk oil prices will decline amid concern the economy will re-enter recession, prompting OPEC to maintain quotas this week.

“People are increasingly questioning the so-called economic upturn, so we might see increased growth in the third and fourth quarter, but there is a danger of double recession,” Sandrine Toerstad, head of market analysis at the Norwegian company, said today at a briefing in Oslo. “This might contribute to bringing down prices” for oil.

Brent crude has risen 48 percent this year, in part on speculation the economy and energy demand will pick up. OPEC is meeting Sept. 9 in Vienna, and all 26 analysts surveyed by Bloomberg News predicted last week the group will maintain its output target at 24.845 million barrels a day.

“Oil inventories are following a downward trend, but when you get to the second quarter of 2010, if OPEC maintains production at current levels, then inventories will start increasing again,” Toerstad said. “I think OPEC is focusing on this, and they will have to cut production further. Given that quota compliance has dropped, I think there’s most probability that they will encourage their members to respect the quotas.”

Falling Compliance

The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world’s oil, cut output quotas by 4.2 million barrels a day between September and December to prevent a glut amid the global recession. The 11 members bound by targets, all except Iraq, have complied with about 70 percent of promised reductions, more than the historical average of 60 percent, Toerstad said. She expects compliance to drop to between 60 and 65 percent in the last four months of the year because of higher oil prices.

Brent crude oil for October traded up 1.7 percent at $67.95 a barrel at 1:45 p.m. local time on the London-based ICE Futures Europe exchange. Crude for delivery in October 2010 is at $73.56 a barrel. When prices for future delivery are higher than near- month contracts, it’s known as contango. That typically encourages companies to put supplies in storage for use later.

“The contango market shows how weak the near-term market is. There is too much oil compared to demand,” Toerstad said.

Stockpiles in the world’s most advanced economies equal about 62 days of consumption, according to the Paris-based International Energy Agency. OPEC ministers have said they want to lower stockpiles to between 52 and 54 days of demand.

Biggest Risks

StatoilHydro forecasts global demand for oil will decline by 1.62 million barrels a day this year and increase by 690,000 barrels a day in 2010, Toerstad said.

Toerstad said one of the biggest risks is low demand for distillates and the build-up in inventories of the products.

Fuel demand for manufacturing and transport diminished as the global recession cut consumer spending, squeezing profits for refiners and forcing them to close some units. Inventories are highest for middle distillates, a group of fuels including diesel, jet fuel and gasoil or heating oil.

“Distillates is what we’re a bit concerned about right now,” Toerstad said. “If demand doesn’t pick up, we see this as a negative sign for the oil market, and that will contribute to a reduction in oil prices.”

Gasoil stockpiles in independent storage in the Amsterdam- Rotterdam-Antwerp area, Europe’s biggest oil-trading hub, rose 0.3 percent to a record 3.03 million metric tons in the week ended Sept. 3, according to PJK International BV. Inventories of middle distillates held in floating storage on tankers are at a record high of 51 million barrels, according to David Wech, head of energy studies at Vienna-based JBC Energy GmbH.

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