UPDATE 3-IEA trims 2011 oil use growth estimate, sees risks

* IEA cuts 2011 oil demand estimate by 50,000 bpd

* IEA says oil market very well supplied

* Monthly report highlights near record industry oil stocks

* OECD oil stocks rise to 61.4 days of forward cover in July

(Adds link to table at bottom of story)

By Christopher Johnson

LONDON, Sept 10 (BestGrowthStock) – World oil demand will keep
rising as the economy expands but the increase in fuel
consumption will be lower in 2011 than 2010 and demand could be
a lot weaker if global growth slows, the IEA said on Friday.

Highlighting near record industry oil stocks in developed
economies, the International Energy Agency said in its monthly
oil market report global oil supply was more than sufficient to
meet current and expected demand over the next year.

“By any measure we have a very well supplied market,” said
David Fyfe, head of the IEA’s oil industry and markets division.

“There is a significant cushion of oil supply to cope with
unforeseen changes and the risks are very much to the downside.”

“If the world economy slows, oil demand could be quite a bit
lower,” he added.

The IEA, which advises major industrial countries on energy
policy, said global oil demand would average around 86.62
million barrels per day (bpd) in 2010, almost a 1.9 million bpd
increase year-on-year, which was 40,000 bpd higher than
previously estimated.

In 2011, consumption is forecast to rise to 87.89 million
bpd, up almost 1.3 million bpd year-on-year. It said demand
growth next year would be 50,000 bpd lower than last month’s
estimate.

NEAR RECORD STOCKS

The IEA raised its estimate of 2010 demand for crude oil
from the Organization of the Petroleum Exporting Countries by
around 100,000 bpd to 28.9 million bpd, saying consumption had
risen a little in many areas including several developed
economies and in the Asia-Pacific region.

But oil stocks were at very high levels.

Oil stocks in the developed economies of the Organisation
for Economic Co-operation and Development (OECD) had risen to
the equivalent of 61.4 days of forward demand by the end of
July, from 61.0 days at the end of June.

OECD industry stocks rose 19.0 million barrels to 2.785
billion barrels in July to near record high levels recorded in
1998, it said.

Preliminary data suggested there had been another build in
OECD oil stocks in August, Fyfe said.

David Hufton, managing director of oil brokers PVM Oil
Associates in London, said the overall tone of the IEA report
sounded pessimistic.

“The evidence is building that supply exceeds demand,”
Hufton said.

Oil prices have been relatively stable over the last year,
mostly trading between $70 and $80 per barrel. Benchmark U.S.
crude oil futures (CLc1: ) for October were around $75.90 at 0940
GMT on Friday.

Fyfe said the IEA was assuming a fairly optimistic outlook
for global economic growth in its oil market forecasts but that
the picture could worsen if world growth was less than expected.

“If we really got quite a marked slowdown in the global
economy, let us say with economic growth closer to 3 percent
than 4.5 percent over the next 18 months, it could knock around
1 million bpd or so off next year’s oil demand,” he said.

The IEA said OPEC crude oil production fell slightly in
August, down by 60,000 bpd to 29.15 million bpd, and production
from the 11 OPEC members with output targets, all except Iraq,
averaged 26.83 million bpd last month.

Relative to its targeted production cuts, OPEC compliance
rates were unchanged at 53 percent in August, it said.

For a table comparing forecasts for 2011 world oil supply
and demand from the IEA, U.S. Energy Information Administration
and OPEC, click: [ID:nLDE68911E]

For a report on the IEA’s outlook for global refining, click
on [ID:nLDE6890O2]
(Editing by James Jukwey)

UPDATE 3-IEA trims 2011 oil use growth estimate, sees risks