World oil demand will be a bit lower than expected this year and next as economic slowdown and high prices curb consumption but the oil market is strong and supply remains tight, the International Energy Agency (IEA) said Thursday. The agency, which advises more than two dozen wealthy industrialized countries on energy policy, said demand for oil from the Organization of the Petroleum Exporting Countries (OPEC) was running ahead of output. And while some oil production from Libya had resumed earlier than expected, the IEA said it would take a long time to return to pre-conflict levels of oil output in the North African producer. Oil supply and demand fundamentals were underpinning “stubbornly high prices,” the IEA said in its monthly Oil Market Report, adding political turbulence was also a risk for oil. The IEA said high oil prices were helping restrain fuel use in the United States, China and Japan and this trend could intensify if economic activity slowed. “The demand picture could sour significantly should economic prospects falter,” the IEA said. The IEA cut its forecast for world oil demand this year by 70,000 barrels per day (bpd) to 89.16 million bpd, and reduced its 2012 demand projection by 20,000 bpd to 90.47 million bpd. This brought the agency's forecast for global oil demand growth in 2011 down by 90,000 bpd, but increased its estimate of expected 2012 oil demand growth by 50,000 bpd. Oil gained, heading for the longest streak of weekly advances since April 2009, on speculation that US economic growth and Europe's efforts to contain the debt crisis will boost fuel demand. Crude for December delivery climbed 71 cents, or 0.7 percent, to $98.49 a barrel at 1:21 p.m. on the New York Mercantile Exchange, after increasing to $99.20, the highest intraday level since July 27. Oil has gained 4.5 percent this week, the sixth weekly increase. Brent oil for December settlement gained 23 cents to $113.94 a barrel on the London-based ICE Futures Europe exchange. Crude oil stockpiles fell 1.37 million barrels to 338.1 million in the week ended Nov. 4, the Energy Department reported on Nov. 9. Stockpiles were forecast to rise 500,000 barrels.
