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IEA Raises 2010 Global Oil Demand Forecast
Published: Friday, 9 Oct 2009 * 8:04 AM ET Text Size By: Reuters
World oil demand will recover at a faster pace than previously expected for the rest of this year and next as the economy picks up, the International Energy Agency said on Friday.
In a monthly report, the agency, which advises 28 industrialized economies, increased its global oil demand growth estimate for 2010 to 1.42 million barrels per day (bpd), up 150,000 bpd from its previous projection.
The IEA joins the U.S. government's Energy Information Administration (EIA) in raising oil demand forecasts this week amid signs the economic climate is improving.
"Demand is nudging higher," David Fyfe, head of the IEA's Oil Industry and Markets Division told Reuters. "On the assumption that we are not in a double-dip situation economically speaking, we would still expect a pick-up in demand next year."
World demand is expected to average 86.05 million bpd next year, the IEA said, partly reflecting brighter economic projections from the International Monetary Fund.
Oil use in 2009 is forecast to average 84.63 million bpd.
The IEA also bumped up estimates for the rest of 2009, saying demand in the fourth quarter would average 85.2 million bpd, 530,000 bpd more than expected last month and up from the 2009 low of 84.1 million bpd in the second quarter.
The IMF on Oct. 1 declared that a global economic recovery had begun and it expected world output to grow by 3.1 percent in 2010, more than previously forecast, led by the world's second-largest oil consumer, China.
In addition, recent U.S. and Asian economic data has shown periodic signs of economic recovery, raising expectations for higher oil demand, the IEA said.
Oil prices were lower after the report was released. U.S. crude [US@CL.1 70.8 -0.89 (-1.24%)] was down below $72 a barrel.
AP
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Not So Bullish
Analysts said that while the IEA forecast higher demand, signs that the Organization of the Petroleum Exporting Countries was pumping more oil meant it was less supportive for prices.
OPEC has been holding down its production since September last year as the recession has eroded demand. The group agreed to keep supply curbs of 4.2 million bpd at a Sept. 9 meeting.
In September, supply from the 11 OPEC members subject to output targets — all except Iraq — rose by 170,000 bpd to 26.4 million bpd, the IEA said. That cut compliance with output curbs to 62 percent from 66 percent in August.
"If OPEC had shown better compliance, it would be a bullish report," said Olivier Jakob, analyst at Petromatrix. "Despite better demand, it looks like stocks will continue to build next year."
Reuters OPEC survey showed OPEC-11 output rose by 200,000 bpd in September, reducing compliance to 63 percent.
Due to higher demand, the IEA said OPEC needed to pump 28.4 million bpd next year, 200,000 bpd more than previously forecast. It lifted the estimate, which is known as the call on OPEC crude and stock change, for the fourth quarter of 2009 by 500,000 bpd.
The 2010 figure remains lower than total OPEC production, including Iraq, of 28.9 million bpd in September.
Even so, OPEC still has the potential next year to bring down inventories, which fell in August, the IEA said.
Oil stockpiles in developed OECD countries dropped to the equivalent of 60.7 days of future demand at the end of August, down from 61.4 days at the end of July.
"While OPEC is presently producing well above output targets, the existing production agreement at least holds the potential to push absolute OECD inventory levels closer to seasonal norms again by second-half 2010," the IEA said.
OPEC issues its monthly report on Oct. 13, completing this month's trio of closely watched forecasts on the world oil outlook.
Copyright 2009 Reuters. Click for restrictions.
Topics:Market Outlook * OPEC * Energy * Commodities
Sectors:Oil and GasPrintEmailText Size
Published: Friday, 9 Oct 2009 * 8:04 AM ET Text Size By: Reuters
World oil demand will recover at a faster pace than previously expected for the rest of this year and next as the economy picks up, the International Energy Agency said on Friday.
In a monthly report, the agency, which advises 28 industrialized economies, increased its global oil demand growth estimate for 2010 to 1.42 million barrels per day (bpd), up 150,000 bpd from its previous projection.
The IEA joins the U.S. government's Energy Information Administration (EIA) in raising oil demand forecasts this week amid signs the economic climate is improving.
"Demand is nudging higher," David Fyfe, head of the IEA's Oil Industry and Markets Division told Reuters. "On the assumption that we are not in a double-dip situation economically speaking, we would still expect a pick-up in demand next year."
World demand is expected to average 86.05 million bpd next year, the IEA said, partly reflecting brighter economic projections from the International Monetary Fund.
Oil use in 2009 is forecast to average 84.63 million bpd.
The IEA also bumped up estimates for the rest of 2009, saying demand in the fourth quarter would average 85.2 million bpd, 530,000 bpd more than expected last month and up from the 2009 low of 84.1 million bpd in the second quarter.
The IMF on Oct. 1 declared that a global economic recovery had begun and it expected world output to grow by 3.1 percent in 2010, more than previously forecast, led by the world's second-largest oil consumer, China.
In addition, recent U.S. and Asian economic data has shown periodic signs of economic recovery, raising expectations for higher oil demand, the IEA said.
Oil prices were lower after the report was released. U.S. crude [US@CL.1 70.8 -0.89 (-1.24%)] was down below $72 a barrel.
AP
--------------------------------------------------------------------------------
Not So Bullish
Analysts said that while the IEA forecast higher demand, signs that the Organization of the Petroleum Exporting Countries was pumping more oil meant it was less supportive for prices.
OPEC has been holding down its production since September last year as the recession has eroded demand. The group agreed to keep supply curbs of 4.2 million bpd at a Sept. 9 meeting.
In September, supply from the 11 OPEC members subject to output targets — all except Iraq — rose by 170,000 bpd to 26.4 million bpd, the IEA said. That cut compliance with output curbs to 62 percent from 66 percent in August.
"If OPEC had shown better compliance, it would be a bullish report," said Olivier Jakob, analyst at Petromatrix. "Despite better demand, it looks like stocks will continue to build next year."
Reuters OPEC survey showed OPEC-11 output rose by 200,000 bpd in September, reducing compliance to 63 percent.
Due to higher demand, the IEA said OPEC needed to pump 28.4 million bpd next year, 200,000 bpd more than previously forecast. It lifted the estimate, which is known as the call on OPEC crude and stock change, for the fourth quarter of 2009 by 500,000 bpd.
The 2010 figure remains lower than total OPEC production, including Iraq, of 28.9 million bpd in September.
Even so, OPEC still has the potential next year to bring down inventories, which fell in August, the IEA said.
Oil stockpiles in developed OECD countries dropped to the equivalent of 60.7 days of future demand at the end of August, down from 61.4 days at the end of July.
"While OPEC is presently producing well above output targets, the existing production agreement at least holds the potential to push absolute OECD inventory levels closer to seasonal norms again by second-half 2010," the IEA said.
OPEC issues its monthly report on Oct. 13, completing this month's trio of closely watched forecasts on the world oil outlook.
Copyright 2009 Reuters. Click for restrictions.
Topics:Market Outlook * OPEC * Energy * Commodities
Sectors:Oil and GasPrintEmailText Size
