IEA sees higher demand for oil but economy weighs

Global oil demand growth is forecast to inch higher over the rest of this year and into 2011, but if the global economy is weaker than forecast any rise in fuel consumption will be wiped out, the IEA said on Wednesday.

Global oil demand was seen at 86.6 million barrels per day (bpd) in 2010, a 1.8 million bpd increase year-on-year and 80,000 bpd higher than in the last monthly report from the International Energy Agency.

For 2011, consumption is forecast to rise to 87.9 million bpd, up 1.3 million bpd year-on-year and a 50,000 bpd rise from last month's figures taking account of baseline adjustments.

The increases were slight and the IEA said they could disappear altogether.

"We are flagging that the signals that are coming out are pretty mixed," said David Fyfe, head of the oil industry and markets division.

"We could lose all that (demand) growth in 2011 if GDP growth comes in about 30 percent lower than the consensus forecasts."

Adding to the bearish elements for the oil price, supplies were expected to rise by more than the revision in demand.

Non-OPEC supply was predicted to grow by 200,000 bpd in 2010 and by 100,000 in 2011, reducing the call on oil from the Organization of the Petroleum Exporting Countries by 100,000 bpd for both years.