Energy body ups 2010 oil demand forecast

Increased economic activity will cause global oil demand to rise faster in 2010 than previously forecast, the International Energy Agency said Friday.

The Paris-based IEA, which advises oil-consuming countries, said in its monthly report that crude demand will reach 86.3 million barrels a day in 2010, up 1.7 per cent from 2009. The new 2010 figure is 130,000 barrels above the agency's forecast from last month.

The forecast for demand in 2009 remains "virtually unchanged" at 84.9 million barrels a day, the IEA said.

Much of the predicted demand increase for 2010isin the developing world, but industrialized countriesare alsoforecast to increase their consumption, particularly in the Pacific region, the IEA said.

The agency also revised upward its medium-term forecast for demand, with oil use in Asia's developing countries exceeding the rise in supply. The IEA said the changes were related to stronger-than-expected oil demand growth in 2009 due to massive fiscal and monetary stimulus programs, as well ashigher forecasts by the International Monetary Fund for economic growth in 2009 and 2010.

Thoseforces were offset somewhat by expectations of higher oil prices, which could slow economic growth rates.

The IEA expects global oil product demand to rise annually by 1.2 million barrels a day during the five-year period starting this year, from 84.9 million barrels a day in 2009 to 90.9 million barrels a day in 2014.