(EnergyAsia, May 31 2010, Monday) — World oil demand is expected to rise by 1.6 million b/d to 86.4 million b/d this year, said the International Energy Agency in its latest monthly forecast.

The predicted increase is down from the 1.8 million b/d increase issued in the April forecast, reflecting the Paris-based agency’s concern with the debt crisis and weakened state of Europe’s main economies. In response to worries over the health of the European economies, oil prices have fallen sharply from the peak of US$87 a barrel reached in late April to just over US$67 a barrel a month later.

“Global oil demand is revised down by 190,000 b/d on average for 2009 and 2010, equating to 84.8 million b/d (-1.2 million b/d year-on-year) and 86.4 million b/d (+1.6 million b/d) respectively.
Revisions stem largely from changes to non-OECD historical baseline data, as slightly higher GDP prognoses from the IMF are counterbalanced by a higher price assumption,” said the IEA.

“OPEC crude output rose by 40,000 b/d in April, to 29.03 million b/d, sustaining a trend of largely stable supply since mid-2009. The ‘call on OPEC crude and stock change’ for 2010 is cut by 400,000 b/d to 28.7 million b/d on lower demand estimates and higher non-OPEC supply. The ‘call’ peaks in 3Q10 at 29.4 million b/d but recedes in 4Q10 on rising non-OPEC supplies.”

“Non-OPEC oil supply fell to 52.4 million b/d in April, on seasonal output curbs. The 2010 forecast is revised up 200,000 b/d to 52.3 million b/d on higher expectations for the US, Canada and China.

Growth in 2010 of 800,000 b/d is the strongest since 2004 and matches that for OPEC NGLs. The Deepwater Horizon drilling accident in the US Gulf on April 20 has led to a major crude spill. Regional production is unaffected but the incident may lead to tighter safety measures and delay further offshore leasing.”