PARIS: The International Energy Agency (IEA) raised Friday its forecast for global oil demand this year following strong consumption in industrialized countries, but held its forecast for next year steady. The IEA lifted its forecast for global oil demand in 2010 to 87.3 million barrels per day, an increase of 400,000 barrels per day from its previous forecast. The agency noted in its monthly Oil Market Report that the forecast 2.8 percent growth of global oil demand was the highest rate since the late 1970s, except for a spurt in 2004. The IEA said demand from the advanced countries in the Organization for Economic Cooperation and Development area has been stronger in recent months, about 1.1 million barrels per day (mbd) higher than estimated just two months ago, mostly due to weather-related factors. It lifted its 2010 demand forecast to 45.9 mbd, for annual growth of 1.0 percent, but the agency said it expected the structural decline their oil consumption to again become apparent again in 2011, declining 0.7 percent. Demand in emerging economies outside the OECD was forecast to continue to show significant growth, but slow to 3.7 percent from 4.7 percent in 2010. Overall, the IEA held its 2011 oil demand forecast to 1.4 percent growth to 88.5 mbd. On Thursday, OPEC raised its forecast for 2010 global oil demand growth to 1.6 percent from 1.3 percent previously. It now expects oil demand growth of 1.32 mbd to 85.78 million bpd. For 2011, OPEC said it expected oil demand to increase by 1.4 percent instead of 1.2 percent to 86.95 mbd. The IEA report said that although US stimulus measures and strong demand in recent months had pumped up the price of oil to about 90 dollars a barrel, the slowdown in demand growth should contain prices. With current demand strength “largely transient”, growth expected to recede in the coming year, and plentiful stocks, the IEA concluded “the recent rise in oil prices may be temporary.” World oil prices slumped Friday on a rise of the dollar and speculation over a Chinese interest rate rise which could curb consumption, with New York's main contract, light sweet crude for December, falling to $1.88 to $85.93, after striking a two-year peak the previous day. On the supply side, global oil supply increased by 830,000 barrels per day in October to 87.6 mbd, with non-OPEC states accounting for most of the increase. Year-on-year, the increase was 1.54 mbd. Non-OPEC supply rose by 750,000 barrels per day to 53.2 mbd in October, primarily due to end of seasonal maintenance in the Caspian states, Norway and lack of storm-related interruptions in the Gulf of Mexico. OPEC production fell 40,000 barrels per day from the level the previous month to 29.15 mbd, the IEA estimated. It lifted its forecast demand for OPEC oil by 400,000 barrels per day to 29.6 mbd, before dipping to 29.4 million in 2011. In September, oil stocks in the OECD area countries plummeted by 42.8 mb to 2,750 mb, said the agency. This was sufficient to cover 59.9 days of consumption, a decline of 60.9 days from August, but which still left the region at or close to the five-year average for its stocks. It said there were declines in crude oil stocks in the Europe and the Pacific, plus significant restocking of heating oil and industrial demand for fuels in Europe and the United States. Oil supplies from outside OPEC will be higher than previously estimated next year on stronger output from North America and China, the International Energy Agency said. Non-OPEC producers will provide 53.4 million barrels a day in 2011, or 250,000 barrels a day more than the agency's estimate a month ago. The supply estimate increase is less than this year's gain. Worldwide crude consumption will increase by 1.2 million barrels a day, or 1.4 percent, in 2011 to 88.5 million barrels a day, the IEA said in a report today. The demand growth forecast is little changed from last month's. In the US, onshore projects and natural gas liquids output will help compensate for reduced offshore supplies following this year's drilling ban, the IEA said. Estimates for Mexico were raised as falling production at mature fields slows, while projections for Chinese output were boosted by 100,000 barrels a day. “The 2011 forecast is hiked on a stronger prognosis for North America and China,” the Paris-based agency said. “In the US, there is renewed evidence of stronger-than-expected performance in onshore areas.” Non-OPEC supply is set to increase by 700,000 barrels a day in 2011, down from projected supply growth of 900,000 a day this year, according to the agency. Oil inventories in the world's most developed economies “plummeted” by 42.8 million barrels to 2.75 billion barrels in September, the agency said.
