The International Energy Agency, an energy adviser to 27 nations, on Tuesday raised its forecast for global oil demand next year and said it expected Chinese oil consumption to rise after the Olympic Games.
The IEA increased its forecast by 70,000 barrels to 87.8 million barrels a day, the agency said in its monthly report. That raises demand growth for 2009 to 1.1 percent, while the rate for this year remains unchanged at 0.9 percent.
Chinese oil demand is expected to increase 5.7 percent next year as consumers in the world's fastest-growing major economy spend more on travel. "Minor revisions" to global growth forecasts, and expectations for rebuilding of depleted heating oil inventories in Germany also contributed to adjustments to world demand, the IEA said.
"Recent trends in Chinese crude runs suggest a possibility of stronger than expected demand, pre-Olympic stockpiling or both," the report from the Paris-based agency said. Chinese demand "will likely rebound" with the lifting of measures to curb pollution during the Olympics, it said.
Oil traded in New York reached a record $147.27 a barrel on July 11. Oil for September delivery was at $113.59 a barrel Tuesday in pre-market trading on the New York Mercantile Exchange.
The Chinese government had closed oil refineries and coal-fired power stations before the Olympic Games to improve air quality. Fuel use will probably recover when these facilities are reopened after the event, the IEA said.
Oil has retreated 22 percent from a record after swelling fuel costs prompted motorists to drive less and airlines to scale back routes. Emerging economies from China and India to Indonesia are raising prices to rein in use of subsidized fuels.
The IEA also lifted its projections for supply from outside Organization of Petroleum Exporting Countries OPEC by about 100,000 barrels a day this year, and next, on an improved outlook for North Sea and U.S. projects. Non-OPEC suppliers will provide 50.1 million barrels a day this year and 50.8 million in 2009.
OPEC, which supplies more than 40 percent of the world's oil, will need to provide about 31.6 million barrels a day this year to balance world supply and demand, the report showed. That's about 100,000 barrels a day less than it estimated last month. The IEA left its estimate for next year's so-called "call on OPEC crude" unchanged at 31.1 million barrels a day.
Saudi Arabia, the biggest producer in OPEC, has agreed twice this year to increase its own daily production in an attempt to curb the rise in oil prices. The group pumped 32.8 million barrels a day last month, 145,000 barrels a day more than in June, according to IEA estimates.
