11 Dec 2010

Oil forecast raised by agency

5:00 pm on 11 December 2010

The International Energy Agency has raised its forecast for oil demand this year, because of global economic recovery and cold weather in Europe.

The IEA lifted its demand forecast for next year and raised its projections for consumption to 2015, citing stronger US growth.

The agency now expects oil demand in 2011 to rise by 1.3 million barrels per day - about 260,000 bpd more than previously forecast.

Crude oil prices reached $US90 per barrel this week, the highest for two years.

The IEA said this was most likely due to a rise in consumption in the third quarter of 2010 from the US and Europe.

It also raised its estimate for daily demand in 2010 by 2.5 million bpd, about 130,000 bpd more than previously forecast.

The BBC reports oil prices have hovered in the upper-$US80s this week, and reached $US90.76 per barrel on Tuesday.

The Organization of Petroleum Exporting Countries meets on Saturday to discuss its official production quotas, although analysts believe output will remain unchanged.

However, the IEA said that OPEC may come under pressure next year to boost supply.