The world will use more oil in the fourth quarter of 2009, marking the first time global fuel demand has risen year-on-year since the second quarter of 2008, the International Energy Agency (IEA) said today.
After successive year-on-year contractions in demand throughout 2009, the IEA's monthly Oil Market Report said oil use was edging higher in the final three months of this year.
The Paris-based adviser to 28 industrialised economies raised its 2009 global oil demand estimate from last month's report by 210,000 barrels to 84.8 million barrels per day (bpd), following a strengthening of the world economy.
Asia leads the rebound in growth, but consumers in developed countries, where economies remain fragile, are more sensitive to high prices, with signs of demand destruction when oil prices rise above $80 per barrel, said David Fyfe, head of Oil Industry and Markets Division at the IEA.
"If prices keep rebounding, there's a risk to the global economy as a whole, even to some of those economies in the Far East and even the Middle East," Mr Fyfe said.
Next year world oil demand is expected to average 86.2 million bpd, following stronger-than-expected preliminary data in North America and buoyant demand in non-OECD Asia and the Middle East, the IEA said.
The oil market fell below $79 a barrel today, not far below its year-high of $82 touched in October. The price is still well-below last year's record of above $147 touched in July 2008.
The IEA is more bullish about the outlook for oil consumption than the two other major oil forecasters, the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries, both of which released reports earlier this week.
However, it said demand for OPEC-produced crude would slip by 190,000 bpd in 2010, more than the 160,000 bpd slippage that Oo itself forecast yesterday.
OPEC this week raised its 2010 demand forecast slightly but said fuel consumption may not return to pre-crisis levels. The IEA predicted less of a rise in 2010 in demand in the United States, the world's largest energy user.
Chinese spending on infrastructure and Saudi Arabian investment in power generation were the two largest drivers behind global economic growth, the IEA said, rather than conventional industrial production.
Stocks of oil in OECD countries are still very high, although they eased to the equivalent of 60 days forward demand at the end of September, down from 60.9 days at the end of August.
OPEC pumped more in oil in October than in September -- taking its compliance with promised curbs down to 61 per cent from 64 per cent, the IEA said.
Reuters