Opec said in a report released Friday that the worst is behind the oil markets, although some demand “destruction” would continue to mar the comeback in oil prices.

The Organization of Petroleum Exporting Countries said May saw the highest monthly average price for its “oil basket” in seven months. Oil prices might have strengthened even more had investors not turned to surging equities and the U.S. dollar not weakened against many world currencies.

Opec’s Monthly Oil Report revised its growth forecast for the world economy, and its authors now see a decline of only 1.3 percent, up 0.1 percent from the last Report.

Not so China and India: although Western economies are still seen shrinking by 2.8 percent, the economies of China and India “have been improving lately”, enough to revise their 2009 growth forecasts from 6.5 percent to seven percent and up five percent to 5.7 percent.

“The forecast for the (Western countries) countries remains unchanged at minus 3.8 percent growth.

As a result, world oil demand is seen declining by only 2.1 million barrels a day, up from the minus-2.8 MM bpd growth year-on-year seen in April 2009.

“As the world economy stabilizes, world oil demand appears to be settling down,” Opec said, citing industry in China and India. Chinese demand grew in April for the first time in 2009.

“This should stop the bleeding in oil demand,” according to the report, although oil demand in May was down 3.7 percent in North America. Yet Brazilian thirst for oil had, in fact, “stopped” Latin America’s demand “bleed”.

“The oil market appears to have entered a new environment,” Opec’s authors commented.