Global oil demand growth expected to moderate in 2011 - IEA

10 September 2010 11:36  [Source: ICIS news]

LONDON (ICIS)--Global oil demand growth is expected to moderate further to 1.3m bbl/day in 2011 to average 87.9m bbl/day, but a weaker‐than‐expected economic outcome could knock as much as 1.2m bbl/day off absolute demand, the International Energy Agency (IEA) said in its monthly oil report on Friday.

The Paris-based organisation said oil demand for 2010 was expected to rise by 1.9m bbl/day to average 86.6m bbl/day, marginally higher than previous projections.

The IEA said the 2010 readings had been revised upwards to reflect stronger data from OECD (Organisation for Economic Co-operation and Development) countries, but added that “significant downside risk persists from fears that the world economic recovery could stall”.

It added that uncertainty regarding a double-dip recession in the OECD persisted.

"Although oil demand growth in the non-OECD is gently slowing down as had largely been assumed, notably in China, it has also been supported by one of Latin America’s periodic bouts of gasoil and residual fuel oil consumption spikes, this time on strong agricultural and industrial output, cold winter temperatures and natural gas shortages,” the report said.

Global oil supply fell 250,000 bbl/day to 86.8m bbl/day in August, as non‐OPEC output dipped to 52.4m bbl/day on seasonal maintenance in Canada, the UK and Russia.

Non‐OPEC projections for 2010 and 2011 were raised minimally, to 52.6m bbl/day and 52.9m bbl/day, respectively, although Atlantic storms could yet curb third-quarter Gulf of Mexico supplies, the organisation said.

Global third-quarter refinery crude throughputs were estimated at 74.7m bbl/day, 0.6m bbl/day above the second quarter on a seasonal lull in maintenance.

Runs could fall to 73.9m bbl/day in the fourth quarter, in line with an expected slowdown in oil demand growth, the IEA said.

“An expected slowdown in global demand growth in the second half of the year will likely again put pressure on refiners to show restraint and reduce run rates beyond planned maintenance in order to support refining margins,” the IEA said.

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By: Hilde Ovrebekk
+44 20 8652 3214



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