IEA raises 2010 oil demand forecast
LONDON — Global oil demand will grow by 120,000 barrels a day more than previously expected in 2010 and will average 86.5 million bpd, the International Energy Agency (IEA) said yesterday, but all growth will come from emerging markets. The Paris-based adviser to 28 industrialised economies added that demand would now grow 1.6 million bpd in 2010 after falling by 1.3 million bpd last year.

The monthly report indicates demand from industrialised nations could have peaked. “Even the recent record US and European winter snows look unlikely to revive OECD demand, which remains flat at best in 2010. An ‘oil-less’ recovery indeed,” the IEA said in its monthly market report. “In contrast, the thirst for oil among emerging economies looks unlikely to diminish anytime soon, absent weaker than expected economic recovery.”

The IEA said a large part of its revision to oil demand growth was down to the International Monetary Fund’s stronger outlook for global economic growth, which is now seen at 3.8 per cent in 2010 from an earlier estimate of 3.1 per cent. The IEA said if global economic growth in 2010 failed to live up to expectations, demand could be around 400,000 bpd lower.

David Fyfe, head of the oil industry and markets division of the IEA, said emerging market growth had been boosted by government support for the economy and subsidies. “There’s a disconnect still between end user prices and international prices,” Fyfe said. The IEA sees oil prices averaging $75 a barrel in 2010. Total non-Opec oil supply is revised slightly higher for both this year and last. It is seen averaging 51.6 million bpd in 2010. — Reuters