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IEA trims 2010 oil demand growth forecast

Global oil demand growth in 2010 will be slightly slower than previously expected, the International Energy Agency (IEA) said today, lowering its forecast, in contrast to two other key forecasters.

business Updated: May 12, 2010 21:56 IST

Global oil demand growth in 2010 will be slightly slower than previously expected, the International Energy Agency (IEA) said on Wednesday, lowering its forecast, in contrast to two other key forecasters.

The agency revised its global oil demand growth forecast by 50,000 barrels per day to 1.62 million bpd from its estimate last month.

David Fyfe, head of the IEA's Oil Industry and Markets Division, said the downward revision was in response to new historical data and that demand from emerging markets would continue to push up the world's oil use.

"The overall baseline has been revised by 0.2 million barrels per day lower but this is an accounting change," Fyfe told Reuters. "The demand growth trend is the same and all of it is coming from non-OECD countries."

The IEA still expects world demand to grow to 86.4 million barrels per day (bpd) this year, up from 84.8 million bpd last year, it said in its Monthly Oil Market Report.

Analysts said the agency's revision was bearish and represented the current weak demand-supply picture.

This contrasts with the Organisation of Petroleum Exporting Countries (OPEC) and U.S. government unit Energy Information Administration (EIA), which both raised their estimates for world oil demand growth in 2010.

In a monthly report, OPEC forecast world oil demand would rise by 950,000 barrels per day (bpd) this year, up 50,000 bpd from its previous estimate. The EIA forecast that global demand would grow by 1.57 million bpd, a 110,000 bpd increase from its month-ago estimate.

"The revisions (by the IEA) fit with our view that fundamentals in the first half do not support sustained advances in crude prices to $100 for the first half, notably on better than expected non-OPEC supply performance, flat OECD oil demand growth," Harry Tchilinguirian, senior oil analyst with BNP Paribas, said.