Global oil demand growth revised upwards for 2010: IEA

Watch CNBC-TV18 live only on MYTV >>

Global oil demand will grow by 120,000 barrels a day more than previously expected in 2010 and will average 86.5 million bpd, the International Energy Agency (IEA) said on Thursday, but all growth will come from emerging markets.

The Paris-based adviser to 28 industrialised economies added that demand would now grow 1.6 million bpd in 2010 after falling by 1.3 million bpd last year.

The monthly report indicates demand from industrialised nations could have peaked.

"Even the recent record U.S. and European winter snows look unlikely to revive OECD demand, which remains flat at best in 2010. An 'oil-less' recovery indeed," the IEA said in its monthly market report.

"In contrast, the thirst for oil among emerging economies looks unlikely to diminish anytime soon, absent weaker than expected economic recovery."

The IEA said a large part of its revision to oil demand growth was down to the International Monetary Fund's stronger outlook for global economic growth, which is now seen at 3.8 percent in 2010 from an earlier estimate of 3.1 percent.

The IEA said if global economic growth in 2010 failed to live up to expectations, demand could be around 400,000 bpd lower.

David Fyfe, head of the oil industry and markets division of the IEA, said emerging market growth had been boosted by government support for the economy and subsidies.

"There's a disconnect still between end user prices and international prices," Fyfe told Reuters by telephone.

The IEA sees oil prices averaging $75 a barrel in 2010.

Total non-OPEC oil supply is revised slightly higher for both this year and last. It is seen averaging 51.6 million bpd in 2010.

The IEA said output from the 11 members of the Organization of the Petroleum Exporting Countries subject to production targets rose 105,000 bpd in January to 29.1 million bpd as compliance with agreed production cuts continued to fall.

The IEA estimated that oil needed from OPEC to balance the markets would total 29.4 million bpd in 2010, up from 28.9 million bpd last year.

Oil inventories in countries of the Organisation for Economic Cooperation and Development (OECD) fell to the equivalent of 58.1 days of forward cover at the end of December.

The agency said stocks likely rose in January but it believed the amount of oil in floating storage fell.