Global oil demand may be more robust than expected, even with a slowdown in economic growth in the United States and Europe, the chief economist of the International Energy Agency (IEA) said Tuesday. Fatih Birol told Reuters on the sidelines of an oil industry conference that fuel consumption in Asia and in the Middle East was holding up fairly well. “The decline in oil demand may not be so big,” Birol said. “Oil is needed to burn at power generators in Japan following the tragic accident at the Fukushima nuclear plant.” “And ... we are seeing good numbers from the Middle East and China. Demand from the Middle East and China is still very strong,” he said. OPEC, which pumps a third of the world's oil, cut its global oil demand growth forecast for a fourth consecutive month on Tuesday, citing the downturn in developed countries and efforts by China and India to curb fuel use. OPEC reduced its forecast of global oil demand growth this year by 180,000 barrels per day (bpd) to 880,000 bpd. Next year it sees oil demand growing slightly faster - by 1.19 million bpd, down 70,000 bpd from its previous estimate in September. Oil prices slipped in New York trade Wednesday after a five-day runup, as caution reigned before the release of US inventory figures. A barrel of West Texas Intermediate for November delivery settled at $85.57 a barrel, down 24 cents from Tuesday's closing level. In London, the benchmark Brent crude for November added 63 cents to close at $111.36. The IEA, adviser to 28 developed economies on energy policy, is due to publish new oil market estimates Wednesday, but is currently more bullish than OPEC, forecasting global oil demand growth this year of more than 1 million bpd and an expansion of 1.42 million bpd in 2012. Total output in September by the Organization of Petroleum Exporting Countries (OPEC) fell 27.24 million barrels a day, from 27.31 million in August. Saudi Arabia pumped only 9.59 million barrels a day in September, a 1.3 percent fall from the previous month, OPEC said in a report. “Given the decline in oil use by the industrial sector, Saudi oil demand was slightly weaker this summer,” OPEC said. OPEC made its biggest-ever oil supply reductions in 2008. Total crude oil output then was only 24.845 million barrels a day for all members except Iraq. Birol said oil demand was mainly driven by the economy. “I see major question marks on the European economy and doubts on the US economy. We also have to look at whether or not the Chinese economy is going to slow down. These are the downside for oil demand,” Birol said. Birol said some of the projections about when Libyan oil would come back on stream looked optimistic, and that this could keep supply relatively tight. “We are talking on the basis of one or two data points. Nobody has the exact appraisal of the current situation of the infrastructure. I would be very positively surprised if Libya comes back by 2013 to pre-war levels,” the IEA chief economist said. “The price of oil still over $100 indicates that market fundamentals are tight and will be tight for some time despite the poor economic data we have seen,” Birol said. Oil prices are stubbornly high. At the start of the year oil prices were in a danger zone hurting the global economy. Even current price levels are high. Over the $100 per barrel is not making it easy for the global economy to recover.”
