IEA ups oil demand forecast for 2009, 2010

The International Energy Agency on Wednesday raised its forecasts for global oil demand this year and next, citing stronger energy appetite in Asian economies, particularly China.

The Paris-based agency added 70,000 barrels a day to its 2010 forecast of global oil demand. The new prediction of 85.3 million barrels a day is a 1.6 per cent increase over this year.

In its closely watched monthly survey, the IEA also increased its 2009 forecast by 190,000 barrels a day to 83.9 million barrels a day but noted this is still 2.7 per cent lower than 2008.

The IEA said "these upward changes have barely dented the sharp demand contraction expected this year."

"The evidence of a bottoming out of the global recession is patchy, and global gasoil demand a key indicator of economic health remains significantly subdued," it said.

Oil price inches up

In New York, oil prices were up slightly, with the price of a barrel hovering just under $70 US a barrel. On Tuesday, the contract fell $1.15 to settle at $69.45.

A rebound in oil demand next year would mark the end of two straight years of falling global oil demand.

The IEA said its forecast for demand in the member nations of the rich-world Organization for Economic Co-operation and Development is "broadly unchanged" in 2010 and "slightly" higher this year.

The annual peak in U.S. gasoline sales during the summer vacation period failed to materialize for the second year in a row, the agency said.

Its prediction for non-OECD demand is higher for both years after a "reappraisal of Chinese demand prospects."