Published On: Wed, Jul 8th, 2009

EIA raises 2009 world oil demand forecast

The U.S. Energy Information Administration on Tuesday once again raised its world oil demand forecast for this year as the global economy gradually improves.

In its monthly energy outlook, the EIA increased its 2009 global oil demand projection to 83.85 million barrel per day (bpd), up 170,000 bpd from its June estimate of 83.68 million bpd. World oil demand this year is still well below 2008 levels of 85.41 million bpd.

The agency said consumption will rebound to 84.79 million bpd in 2010, up 380,000 bpd from the previous estimate of 84.41 million.

The slumping economy had prompted months of major downward revisions before the agency increased its oil demand projection for 2009 by 10,000 bpd last month.

The change reflects some positive economic news from the world’s largest petroleum consuming countries, including the United States and China.

“In particular, there has been stronger economic activity in Asia than was previously anticipated, and the current forecast reflects higher expected oil consumption in that region,” the EIA said.

Optimism that a potential economic recovery could lift flagging fuel demand has helped lift crude prices from below $33 a barrel in December to more than $70 a barrel last month.

While the price gains have fueled concerns that higher energy costs could dampen any economic recovery, oil has fallen back to around $63 a barrel due to weaker economic data, including last week’s grim jobless data.

The agency actually lowered its 2009 U.S. demand forecast by 10,000 bpd to 18.85 million bpd, down from 18.86 million bpd in a previous forecast.