Growth in global oil demand will accelerate next year as the world recovers 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 per cent, 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 countries such as India and China and also by the rich industrialised nations of the West.
"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.
Oil markets were largely unmoved by the IEA report.
Benchmark US crude oil futures for January were up 57 cents at $71.11 per barrel by 1049 GMT, almost unchanged.
"The IEA report is actually quite bullish for the market," said Eugen Weinberg, commodities analyst at Commerzbank, noting the IEA raised its estimate of demand for Opec oil next year.
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 U.S. 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.
Oil output by the Organization of the Petroleum Exporting Companies inched up in November, led by a rebound in Nigeria, 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 per cent from 60 per cent 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.
Oil inventories in the developed countries of the OECD had fallen slightly, the IEA said, but were still historically high and 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 are also still relatively high at around 55 million barrels, the IEA said, down from around 61 million barrels at the end of October.
Refined oil product stocks at sea have increased, to 98 million barrels at the end of November from 83 million at the end of October.
Mr Fyfe said the scale of future oil demand and the absorption of oil inventories would depend heavily 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."