IEA forecasts slower oil demand growth in 2011

IEA forecasts slower oil demand growth in 2011

London: Global oil demand growth will slow next year, leaving the market with comfortable supplies until at least the middle of next year, the International Energy Agency said in its monthly Oil Market Report on Tuesday.

Global oil demand will grow by 1.35 million barrels per day (bpd) next year to 87.84 million bpd, the IEA said in its first 2011 demand projection in a monthly report.

The agency, which advises 28 industrialised countries, also raised its forecast for 2010 by 80,000 bpd to 1.77 million bpd.

“The key element is the gradual scaling back of economic stimulus programmes which we are assuming takes place over the next 12-15 months," said David Fyfe, head of the IEA’s Oil Industry and markets division, in an interview with Reuters Insider TV.

“That’s taking a little of the post-recessionary froth out of the market."

US crude prices were up 13 cents at $75.08 a barrel by 0920 GMT after rising by as much as 43 cents to $75.38 a barrel earlier.

The IEA’s forecast reinforced the findings of its medium-term oil report, which said rising supplies will mostly offset higher demand over the next five years.

Next year’s growth will mostly come from Asia, the Middle East and Latin America as the global economic recovery gains traction, the IEA said.

Demand for oil in countries within the Organization for Economic Cooperation and Development (OECD) -- including the world’s largest oil consumer the United States -- will fall by 210,000 bpd next year.

“North America will cease to act as an engine of demand growth in the OECD as the 2010 economic rebound, fuelled by government spending and private-sector restocking, fades," the report said.