LONDON: World oil demand this year will be slightly higher than previously expected, the International Energy Agency (IEA) said on Friday, because of growth in developing countries.
The agency lifted its absolute demand estimates for 2009 and 2010 by 70,000 barrels per day (bpd) from its estimate in February. It now expects world demand to average 86.57 million bpd this year.
Growth in demand will be 1.57 million bpd in 2010 compared with the previous year, the Paris-based adviser to 28 industrialized economies said, maintaining its forecast from last month.
“We revised up figures for both 2009 and 2010 on the basis of strong non-OECD demand, David Fyfe, head of the oil industry and markets division of the IEA, told Reuters. “The trend in demand growth is very similar to last month’s.
The IEA remains the most optimistic among the three major forecasters on the prospects for oil demand growth this year. OPEC expects an expansion of 880,000 bpd, while the US government’s energy forecaster predicts growth of 1.5 million bpd.
“We are still seeing strong growth from emerging markets, especially Asia. However, OECD demand still looks sluggish, Fyfe said.
The agency said in its monthly oil market report that China’s oil demand, or refinery output plus net oil product import, rose 28 percent in January from a year earlier.
It also raised Chinese oil product demand forecast by 130,000 bpd from the previous report to reach 9 million bpd this year on back of a large 510,000 bpd upward revision just for the first quarter.
That is a 6.2 percent increase from 2009.
International benchmark US crude futures rose 58 cents to $82.69 a barrel by 1118 GMT.
However, strong outlooks for demand from Asia were offset by bleak forecasts for OECD, increasing crude oil supplies and rises in inventories, Harry Tchilinguirian, BNP Paribas’ senior analyst, said.
“While the demand-side revisions by the IEA in Asia give a bullish hue to the oil fundamentals, past the headlines you have a complete offset in terms of upwards revisions to China in the first quarter of 2010 by downward revisions in OECD Europe, Tchilinguirian said.
The IEA said oil demand in Europe plunged by 8 percent in January from a year earlier and the forecast for 2010 oil demand in the region has been revised down by 150,000 bpd from the previous estimate.
The agency said oil supply from outside OPEC would rise 300,000 bpd to average 51.8 million bpd in 2010 – an upward revision of 200,000 bpd from the previous month’s forecast.
As a result of the higher demand and non-OPEC supply forecasts, the IEA trimmed its estimate of demand for crude from the Organization of Petroleum Exporting Countries by 100,000 bpd to average 29.3 million bpd in 2010.
As the OPEC will meet to review its output policy next week, the IEA said its crude oil supply hit a 14 month high of 29.2 million bpd in February, with its compliance to the agreed target slipping to 56 percent from 58 percent in January.
Oil stocks in industrialized countries that are members of the Organization for Economic Cooperation and Development (OECD) rose to 59.2 days of forward demand at the end of January from 58.3 days at the end of December.