IEA Sees Stronger Oil Demand Through Year-End, 2010

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"Global oil demand is revised up nearly 500,000 b/d for both 2009 and 2010."

In its September Oil Market Report, the International Energy Agency has revised upward its global oil demand forecasts for 2009 and 2010.

Global oil demand is revised up nearly 500,000 b/d for both 2009 and 2010. IEA now sees demand averaging 84.4 million b/d this year and 85.7 million b/d next year, mostly on stronger-than-expected data in North America and in Asian countries outside the Organization for Economic Cooperation and Development. The revised forecast means that worldwide demand in 2009 will contract 1.9 million b/d from a year ago.

IEA reports that the global economy is stabilizing, but OECD demand is poised to remain weak for the remainder of this year, while seemingly strong non-OECD demand may be obscured by Chinese stock-building.

Forecast OECD oil demand has been increased by roughly 270,000 b/d for both 2009 and 2010, given higher-than-expected 2Q09 data and indications that demand in the second half of this year may be stronger than previously anticipated, notably in North America. OECD oil demand is now pegged at 45.4 million b/d both this year and next.

IEA also adjusted upwards its forecast of non-OECD oil demand for both 2009 and 2010, mainly due to a reappraisal of Chinese demand prospects, which have been boosted by stock-building and government stimuli. Also, demand data submitted to IEA for the FSU and Latin America turned out to be higher than previous submissions, the agency said.

This year's non-OECD demand is now expected to average 39.1 million b/d, up 400,000 b/d from 2008. The revision for 2010 puts average non-OECD oil demand at 40.3 million b/d.

The revised demand outlook increases the call for crude from OPEC to 28.3 million b/d for 3Q09 and 27.9 million b/d in 4Q09.

OPEC, at its Sept. 9 meeting in Vienna, left its production targets unchanged. IEA estimates that OPEC crude oil supply in August was up 55,000 b/d from a month earlier, averaging 28.8 million b/d. Higher production from Nigeria, Venezuela, and Angola offset lower output by Saudi Arabia, Iran, and Iraq, IEA reported.

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