IEA hikes oil demand forecast

The International Energy Agency has raised its forecasts for global oil demand for 2010, saying the recovery in developed economies has been stronger than expected.

In its monthly report on the oil markets issued Thursday, the Paris-based agency raised its estimate by 60,000 barrels a day.

Itnow predicts demand will be86.4 million barrels a day, which would be a two per cent increase over demand in 2009.

The prediction helped the July crude contract on the New York Mercantile Exchange gain$1.10to close at $75.48 US a barrel.

The IEA also suggested the failure of the Deepwater Horizon drilling rig and the continuing oil spill in the Gulf of Mexico may prove "to be a supply-side game changer." However,it said it couldn't be sure what regulatory changes will result and how that might affect supplies.

It said an assumption of one to two years of delays for all planned new deepwater oilfield projects implies a reduction of up to 300,000 barrels a day in 2015 production from the U.S. Gulf of Mexico.

The agency is the energy arm of the Organization for Economic Co-operation and Development, a grouping of the world's richest nations.