IEA lifts 2010 oil demand forecast as surging Chinese growth offsets flagging OECD demand

Global oil demand seen higher in 2010

PARIS — World oil demand will rise this year due to surging economic activity in Asian countries, especially China, the International Energy Agency said Friday as it bumped up its forecasts.

The Paris-based IEA, which advises oil-consuming countries, predicted in its monthly report that oil demand will average 86.6 million barrels a day this year, or 1.6 million barrels a day more than in 2009.

The IEA’s previous report, in February, had estimated daily demand in 2010 of 86.5 million barrels. The estimate for 2009 was revised upwards to 85 million barrels a day.

The agency said that after five consecutive quarters of decline, “the latest data confirm that global oil demand resumed growth on a yearly basis in the fourth quarter of 2009.”

Oil demand in developed economies will fall 0.3 percent in 2010, but this will be offset by higher demand in Asia, the IEA said.

“China is currently expected to account for almost a third of global oil demand growth in 2010,” the IEA said.

Global oil demand fell 1.4 percent last year compared to 2008, as the Great Recession caused oil demand in OECD countries to drop by the biggest amount since the early 1980s.

While oil demand in OECD countries is seen contracting in 2010 for the fifth consecutive year, growth in developing countries is more than picking up the slack, the IEA said.

“This year’s global oil demand growth will be driven entirely by non-OECD countries, with non-OECD Asia alone representing over half of total growth,” the IEA said.

Global oil demand hit an all-time peak in 2007 at 86.5 million barrels a day.

This year’s rebound is forecast to be driven by China, where the IEA said preliminary data indicated that demand “surged by an astonishing 28 percent year-on-year in January.”