On Friday 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 IEA said in its monthly Oil Market Report that the predicted 2.8 per cent growth of global oil demand was the highest rate since the late 1970s, except for a spurt in 2004.
The International Energy Agency has raised its forecast for global oil demand this year following strong consumption in industrialized countries, but held its forecast for next year steady.
The IEA said demand from the advanced countries in the Organization for Economic Cooperation and Development (OECD) area has been stronger in recent months, about 1.1 million barrels per day (mbpd) higher than estimated just two months ago, mostly due to weather-related factors.
It lifted its 2010 demand forecast to 45.9 mbpd, for annual growth of 1.0 per cent, but the agency said it expected the structural decline in their oil consumption to again become apparent again in 2011, declining 0.7 per cent.
Demand in emerging economies outside the OECD was forecast to continue to show significant growth, but slow to 3.7 per cent from the 4.7 per cent in 2010.
Overall, the IEA held its 2011 oil demand forecast to 1.4 per cent growth to 88.5 mbpd.
On Thursday, the Organization of Petroleum Exporting Countries (OPEC) raised its forecast for 2010 global oil demand growth to 1.6 per cent from 1.3 per cent previously. It now expects oil demand growth of 1.32 mbpd to 85.78 mbpd.
For 2011, OPEC said it expected oil demand to increase by 1.4 per cent instead of 1.2 per cent to 86.95 mbpd.
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 a barrel, the slowdown in demand growth should contain prices.
With current demand strength "largely transient", growth was expected to recede in the coming year, and with high inventories the IEA concluded, "The recent rise in oil prices may be temporary".
World oil prices slumped on 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 -$3 to $84.85 dollars, after hitting a two-year high the prior day.
On the supply side, global oil supply increased by 830,000 barrels per day in October to 87.6 mbpd, with non-OPEC states accounting for most of the increase. Year-on-year, the increase was 1.54 mbpd.
Non-OPEC supply rose by 750,000 barrels per day to 53.2 mbpd in October, primarily due to end of seasonal maintenance in the Caspian states and Norway and lack of storm-related interruptions in the Gulf of Mexico.
OPEC production fell 40,000 barrels per day from the September to 29.15 mbpd, the IEA estimated.
It lifted its forecast demand for OPEC oil by 400,000 barrels per day to 29.6 mbpd, 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.
The IEA 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.
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