EIA may raise world oil demand forecast

By Ayesha Rascoe

WASHINGTON (BestGrowthStock) – Rapid growth from emerging markets may push the U.S. government’s energy forecasting agency to lift its global oil demand forecast on Tuesday, just days before OPEC meets to decide its oil output quotas.

The Energy Information Administration was due to release on Tuesday its monthly short-term energy report, the first of three major oil forecasts coming out this week.

The International Energy Agency and the Organization of the Petroleum Exporting Countries were both scheduled to unveil their monthly energy forecasts on Friday, a day ahead of OPEC’s meeting in Ecuador.

Last month, the EIA boosted its 2011 world oil demand growth forecast by 33,000 barrels per day to 1.44 million bpd.

The agency estimated global oil consumption would reach 87.8 million bpd, with China, the Middle East and Brazil making up most of the expected growth in oil demand.

The IEA last month lowered its world oil demand growth forecast to 1.19 million bpd, with consumption expected to reach 88.51 million in 2011.

Both the EIA and the IEA have been more bullish on world oil demand than OPEC, which said it expected world oil demand to rise 1.17 million bpd to 86.95 million bpd next year.

Continued economic expansion in developing nations could lead EIA to at least modestly raise its world oil demand forecast again this month, analysts said.

“The demand in China, I think that’s going to drive the number overall,” said Phil Flynn of PFGBest Research. “The increased demand in emerging markets may force the EIA to upwardly revise their demand forecast as a whole.”

Tim Evans, energy analyst for Citi Futures Perspective, said he did not think the EIA’s report would have much weight on OPEC’s output decision, however.

“I think the only thing that OPEC is particularly watching is the price (of oil),” Evans said. “The price going up puts a smile on their face and makes them unlikely to make any change in official policy for fear of upsetting the market.”

Several member states have said there is unlikely to be a change in production quotas at the meeting.

In the United States the economic rebound has been a bit stilted, with some areas, such as retail sales, showing relative strength, but employment remaining sluggish.

Last week the government said nonfarm payrolls rose only 39,000 in November, much lower than expected.

“Although the outlook for the U.S. doesn’t look great, it looks better than it did a couple of months ago,” said Matt Smith, an energy analyst with Summit Energy.

“As long as we can see the U.S. treading water here, we’ll see demand growth really be carried through by these emerging markets,” Smith added.

(Editing by Walter Bagley)

EIA may raise world oil demand forecast