Growth in world oil demand will accelerate next year as industrialised and developing nations recover from economic slowdown, the International Energy Agency said today.
The Paris-based adviser to 28 industrialised economies said global oil demand would increase by almost 1.5 million barrels per day (bpd), or 1.7%, in 2010 to 86.3 million bpd, and the rate of growth in demand was also set to rise.
The IEA’s monthly oil market report raised its oil demand growth forecast for 2010 compared with 2009 by 120 000 bpd, saying the increase in fuel consumption was being driven by developing economies and also by demand in richer nations.
“Oil demand looks a bit stronger,” said David Fyfe, head of the oil industry and markets division of the IEA. “Looking at 2010, it is an adjustment in a bullish direction.”
The IEA’s forecast contrasts with a prediction this week by the US Energy Information Administration, which lowered its forecast for global oil demand next year, pointing to weaker recovery by leading consumers such as the United States.
The US government agency said global oil demand next year would be around 85.22 million bpd, 1.11 million bpd lower than the estimate by the IEA.
The IEA said non-OPEC oil supply was expected to increase by 125 000 bpd overall this year as a result of higher Russian production, particularly of gas liquids, and after the quietest US hurricane season for more than a decade.
But non-OPEC oil supply was expected to decline next year, the IEA said, by around 265 000 bpd to 51.6 million bpd following declines in North American supply.
OPEC output rises
The IEA said oil output from the Organization of the Petroleum Exporting Companies inched up in November, led by a sharp rebound in Nigerian output, and OPEC production was now at its highest level in a year.
The 11 OPEC countries subject to oil targets all excluding Iraq pumped 90 000 bpd more oil in November, taking compliance with promised production curbs down to around 58% from 60% in October, the IEA said.
The IEA said demand for OPEC’s oil would increase by about 500 000 bpd next year to around 29 million bpd, but the increase in demand could also be met by drawing down oil stocks, which are historically high.
Oil inventories in the developed countries of the OECD had fallen slightly, the IEA said, but were still the equivalent of around 59.4 days forward demand cover at the end of October, down from 60.2 days at end of September.
Stocks of some types of oil products, including middle distillates such as diesel and heating oil, are well above their five-year range in North America and Europe.
Short-term stocks of crude oil in floating storage at sea are also relatively high at around 55 million barrels, the IEA said, down from around 61 million barrels at the end of October.
Oil markets were largely unmoved by the IEA report, balancing their reaction to the forecasts of higher demand with some of the caveats over higher production.
Benchmark US crude oil futures for January were up 40c at $70.94 per barrel by 1009 GMT, almost unchanged.
But some analysts were more positive.
“The IEA report is actually quite bullish for the market,” said Eugen Weinberg, commodities analyst at Commerzbank. “The key is the non-OECD demand. They have upped the call on OPEC.”
Fyfe said much would depend on economic growth: “It is all about the economy, particularly in the OECD. The jury is still out on the exact shape of the recovery.”