World oil demand and prices will rise this year, driven higher by strong growth in emerging economies, the International Energy Agency said today, revising upward earlier forecasts.
The Paris-based agency said demand was now expected to be 86.5 million barrels a day in 2010 compared to a forecast last month of 86.3, while average prices will rise to $75 a barrel from $58 in 2009.
Global daily demand is now estimated at 84.9 million barrels per day (mbd) in 2009, and thus the IEA is predicting a 1.6 million barrel per day increase.
Demand growth is expected to come entirely from outside the Organisation for Economic Cooperation and Development (OECD), a grouping of 30 developed economies including Britain, France, Germany, Japan and the US.
'Even the recent record US and European winter snows look unlikely to revive OECD demand - which remains flat at best in 2010,' the agency said in its monthly oil market report.
The IEA said this was partly due to slow growth in European and North American markets but also because of a move away from oil to gas, renewable energies and nuclear power for heating, power and industrial processes.
'The one area that drove OECD oil demand growth in recent years - North America - has virtually stalled as a result of the sharp economic recession, cheaper energy alternatives and behavioural changes,' it said.
By contrast, the world's major emerging economies - particularly Asian powerhouses China and India - are expected to consume more and more oil as they return to strong growth and look to ramp up manufacturing.
Demand for oil in non-OECD countries is expected to surge by 4%. February's revised report was in line with higher economic growth forecasts from the International Monetary Fund, it said.
The IMF now projects growth of 3.9% in 2010, following a 0.8% contraction in 2009, the first global downturn since World War II.
Meanwhile, oil prices rose slightly this evening despite a stronger dollar, in see-saw trade inspired by gains on Wall Street due to positive US job numbers.
US crude rose 67 cents to $75.19 a barrel, while London Brent crude rose 79 cents to $73.33.
US shares climbed on news of an EU plan to aid debt-ridden Greece as well as US data showing that first-time jobless insurance applications fell more than expected last week.
The oil market's focus on Wall Street may be due, in part, to a delay in the US weekly inventory data from the Energy Information Administration, which traders scour for clues on demand in the world's top oil user.
Weekly EIA data, normally released on Wednesdays, was delayed until Friday due to snow in Washington.
