IEA lifts 2008 world oil demand growth forecast

LONDON – World oil demand will grow more quickly than expected next year fuelled by the Middle East and proving resilient to record-high prices, the International Energy Agency said on Friday.

The IEA, adviser to 27 industrialised countries, said in its monthly Oil Market Report that demand will rise by 2,1 million barrels per day (bpd) next year, up 200 000 bpd from its previous forecast. “A lot of this demand is in the non-OECD countries, where we don’t have any downgrades in economic growth forecasts,” said Lawrence Eagles, head of the IEA’s Oil Industry and Markets division.The report comes as economic growth in the United States, the world’s top consumer, is slowing.But many of the world’s fast-growing economies cap fuel prices, helping to insulate consumers from costly oil.For much of this year, the IEA has been urging the Organisation of the Petroleum Exporting Countries to raise supply to allow consumers to build up inventories and lower prices.Stocks in member-countries of the Organisation for Economic Cooperation and Development fell by 22,4 million barrels in October to equal 52,6 days of demand, just below the five-year average, the IEA said.Oil extended an earlier gain after the IEA report was released and was up US$1,07 a barrel at US$93,32 as of 1008 GMT.It hit a record of US$99,29 late last month.OPEC SUPPLY While lifting the demand outlook for next year, the Paris-based IEA also trimmed its forecast for growth in oil demand in the last quarter of 2007.Consumption in the fourth quarter will to rise by 1,3 million bpd, 200 000 bpd less than previously expected, the IEA said.”Overall, winter prospects have clearly improved,” the IEA said.”But US$90-a-barrel oil makes clear that the market is still on edge and is unlikely to relax until the peak weather risks have subsided.”Opec at a meeting earlier this month decided leave oil supply unchanged, rebuffing consumer calls for more oil.But the group is expected to pump more oil anyway, the IEA said.”There are early indications of further Opec supply gains in December,” the report said.Last month, production from the 10 Opec members that agree to limit supply, all except Iraq, Angola and Ecuador, averaged 27.1 million bpd, the IEA said.That fell short of Opec’s target of 27,25 million bpd as field maintenance in the United Arab Emirates offset increases from Saudi Arabia and other members.Nampa-Reuters”A lot of this demand is in the non-OECD countries, where we don’t have any downgrades in economic growth forecasts,” said Lawrence Eagles, head of the IEA’s Oil Industry and Markets division.The report comes as economic growth in the United States, the world’s top consumer, is slowing.But many of the world’s fast-growing economies cap fuel prices, helping to insulate consumers from costly oil.For much of this year, the IEA has been urging the Organisation of the Petroleum Exporting Countries to raise supply to allow consumers to build up inventories and lower prices.Stocks in member-countries of the Organisation for Economic Cooperation and Development fell by 22,4 million barrels in October to equal 52,6 days of demand, just below the five-year average, the IEA said.Oil extended an earlier gain after the IEA report was released and was up US$1,07 a barrel at US$93,32 as of 1008 GMT.It hit a record of US$99,29 late last month.OPEC SUPPLY While lifting the demand outlook for next year, the Paris-based IEA also trimmed its forecast for growth in oil demand in the last quarter of 2007.Consumption in the fourth quarter will to rise by 1,3 million bpd, 200 000 bpd less than previously expected, the IEA said.”Overall, winter prospects have clearly improved,” the IEA said.”But US$90-a-barrel oil makes clear that the market is still on edge and is unlikely to relax until the peak weather risks have subsided.”Opec at a meeting earlier this month decided leave oil supply unchanged, rebuffing consumer calls for more oil.But the group is expected to pump more oil anyway, the IEA said.”There are early indications of further Opec supply gains in December,” the report said.Last month, production from the 10 Opec members that agree to limit supply, all except Iraq, Angola and Ecuador, averaged 27.1 million bpd, the IEA said.That fell short of Opec’s target of 27,25 million bpd as field maintenance in the United Arab Emirates offset increases from Saudi Arabia and other members.Nampa-Reuters