IEA raises global oil demand outlook

IEA raises global oil demand outlook
# 12 August 2009 14:57 (UTC +04:00)
Baku– APA-Economics. The International Energy Agency raised its global oil demand forecasts for this year and next, citing accelerating industrial activity in China, the world’s fastest-growing consumer of crude, Bloomberg reports.
The world will need an average of 85.25 million barrels of oil a day next year, 70,000 barrels a day more than previously estimated, the adviser to 28 nations said in its monthly report today. Demand growth next year at 1.6 percent will be lower than earlier forecasts after the outlook for 2009 was also increased. The agency boosted predictions for supply from outside OPEC.
“There are some signs of life, certainly in the Chinese economy,” David Fyfe, head of the IEA’s oil industry and markets division, said by telephone from Paris. “But you’ve got to offset that with what’s happening” in developed economies, where industrial activity remains “very sluggish,” he said.
Oil futures in New York have advanced 55 percent this year, trading last at $69.66 a barrel, amid record Chinese crude imports. The country’s economic stimulus package will help boost its oil demand by 4 percent to 8.4 million barrels a day next year, the IEA said, after raising its forecast for both 2009 and 2010 by about 130,000 barrels each.
Outside the emerging economies, “industrial production growth remains firmly in negative territory, even though the pace of decline has somewhat slowed,” the IEA added. “More worryingly, industrial production has seemingly not reached the bottom in the U.S.”
Global oil demand will still contract by 2.7 percent to 83.9 million barrels a day this year, even with an upward revision of 190,000 barrels a day, the IEA said.
“The jury’s still out on China,” Fyfe added. “It’s unclear how much of the growth in demand is coming from the economic package, and the extent to which it’s from fluctuations in the domestic pricing structure.”
The agency bolstered its forecast for production from outside the Organization of Petroleum Exporting Countries by 200,000 barrels a day in 2010, and 160,000 barrels a day this year, on higher-than-expected Russian output.
Non-OPEC producers, accounting for about 60 percent of global supply, will provide 51.4 million barrels a day next year, according to the agency. Increased production in the Gulf of Mexico and from Canadian oil sands projects will contribute to the expansion, it said.
Still, the increase to demand growth expectations for next year means that even with higher non-OPEC supply, the amount of crude required from OPEC itself is little changed at 27.4 million barrels a day, according to the agency.
Supply from the 11 OPEC nations subject to quotas, from which Iraq is exempt, fell in July for the first time in three months because of disruptions in Nigeria. Those 11 members pumped 26.12 million barrels a day last month, a reduction of 120,000 barrels a day from June that gives a compliance rate of 70 percent with record cuts announced last year.
The group, due to meet on Sept. 9 in Vienna to review production quotas, yesterday gave a lower estimate for 2010 global oil demand than the IEA of 84.4 million barrels a day.
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