IEA Raises Oil Demand Outlook

Economic recovery is pushing up estimates of oil demand this year and next, but dangers to growth in advanced and some emerging countries are on the prowl, the International Energy Agency (IEA) said. There is a "significant" risk to the latest upgraded forecast for oil demand, which in any case means that the new estimate of demand in advanced countries points to a slight net fall in 2011, the IEA said.

It raised its estimate for demand for oil around the world this year by 80,000 bpd, and for the next year by 50,000 bpd. This was on the basis that the global economy would grow by 4.5 % this year but by 4.3% in 2011.

Total demand for oil this year would rise by 1.8 million bpd from demand last year or by 2.2% to 86.6 million bpd. It would then rise by 1.3 million bpd or 1.5% to 87.9 million bpd next year. "However, concerns that the global economic recovery may falter from the second half of 2010 pose a significant downward risk to the forecast."

The agency also edged up demand for oil in advanced countries in the OECD by 30,000 bpd for this year and next. This would mean an 80,000 bpd or 0.2% increase this year to 45.5 million bpd, but followed by a 200,000 bpd or 0.4% fall next year to 45.3 million bpd.

For both global, and OECD demand, if global growth were one-third lower than expected, oil consumption would be curtailed significantly and the fall in OECD countries in 2011 would be "steeper." - APF