IEA prunes oil demand forecast
Mumbai: The International Energy Agency (IEA), has revised its daily demand forecast slightly downward by 50,000 barrels to 1.77 million barrels a day. The agency reports on the global oil demand/supply and inventories.

This is the first downward revision in IEA's demand forecast for many months. The agency says that it believes that the factors that drove world crude oil prices to all-time highs since the beginning of this year seem to be dissipating.

NYMEX WTI crude oil futures had hit a high of over $58 a barrel in April.

IEA's reasons for a downward revision include a slowdown in Chinese demand growth to 5.4 per cent in the first two months of 2005 from the breakneck 21 per cent growth recorded in the year-ago period.

World oil supplies, which had fallen in January, have risen by 3,65,000 barrels per day (bpd) to 84.2 million bpd in March 2005. Of this, 3,15,000 bpd increase came from the cartel of Organisation of Petroleum Exporting Countries (OPEC).

According to the IEA report, oil produced by non-OPEC oil producers or the OECD countries including US, Canada, etc. is expected to jump in the second half of 2005. Also, OECD stocks fell by 39 million barrels in February. But stocks are 96 million barrels above last year levels.

If OPEC and non-OPEC growth capacities are combined, long-term projections estimate an aggregate increase of 1.75 million bpd on an average through to 2010. This is slightly higher than average increase in long-term demand so far, at 1.5 million bpd or a growth of 1.7 per cent.
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