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12:07 GMT
PARIS, Nov 10 (KUNA) - The International Energy Agency (IEA) on Thursday
forecast slightly weaker global crude oil demand in 2011 and 2012 because of
the ongoing economic woes affecting world growth and the uncertainty caused by
the European debt crisis.
In its latest monthly "Oil Market Report," the IEA said that demand for oil
this year would only rise by 900,000 barrels per day (b/d), a downward
revision of 70,000 b/d from forecasts a month ago. It is the third time in as
many months that the IEA has revised projected demand downwards.
Demand in 2011 is now expected to reach 89.2 million b/d, up 1.0 percent
from 2010. Projections for demand growth in 2012 have been revised downwards
by 20,000 b/d and demand next year should reach 90.5 million b/d, around 1.5
percent higher than in 2011.
Nonetheless, the Paris-based IEA said that there was some uncertainty on
the direction of global demand and oil prices due to a variety of risks,
including the slower-than-expected growth in the global economy.
The IEA cited the "ever-present threat of a far-reaching financial
collapse" due to debt problems in Europe as one of the risk factors present on
the oil market.
It said that oil markets were "inextricably linked to the deterioration in
the European debt situation" and there was a "heightened risk of global
recession" because of the impact on financial markets and a negative effect on
oil demand.
However, the Agency noted that some of these risks were offset by demand
increases and tighter supply markets as the winter season begins in the
Western hemisphere.
While political risks have diminished and increased supply is now flowing
from suppliers like Libya, there are still underlying tensions in some
producer countries and there are "concerns" about the stand-off over the
Iranian nuclear problem.
Additionally, the IEA said that certain production areas like the Gulf of
Mexico have been so far spared interruptions because of the traditional
hurricane season and this has led to less-tight markets.
But, the IEA noted, its member countries have been drawing heavily on
inventories of late to top up supply and these will have to be rebuilt coming
out of the winter season. (End)
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