Global oil demand growth will 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 in its monthly report today.
Global oil demand was seen at 86.6 million barrels per day (bpd) in 2010, a 1.8 million increase year-on-year and 80,000 higher than in the last report from the International Energy Agency, which advises 28 industrialised countries.
For 2011, consumption was 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."
US crude oil prices were trading down 60 cents at $79.65 a barrel this morning.
Adding to the bearish elements for the oil price, supplies were revised upwards by more than the revision in demand.
Non-OPEC supply was predicted to grow by 200,000 bpd in 2010 to 52.6 million barrels per day (mbpd) and by 100,000 in 2011 to 52.9 (mbpd) compared with the previous month's report.
Outright non-OPEC supply growth is 850,000 bpd for 2010 and 340,000 bpd for 2011.
This followed an upwards revision in the U.S. baseline adjustment and higher Chinese oil output in the second quarter.
The amount of oil required from the Organisation of the Petroleum Exporting Countries to balance the market was reduced by 100,000 bpd for both years.
Oil stocks held in countries within the Organisation for Economic Co-operation and Development amounted to 61 days forward cover in late June and were barely changed from May.
Reuters