Global oil demand forecast raised

The International Energy Agency on Friday raised its forecast for global oil demand, citing stronger-than-expected consumption in North America and emerging Asian countries, especially China.

The Paris-based agency noted that under such conditions OPEC could come under pressure next year to boost supply.

Global demand in 2011 should hit 88.8 million barrels a day, 260,000 daily barrels more than previously expected, the agency said. The IEA also raised itsestimate of 2010 consumptionto 87.4 million barrels a day, up 130,000 daily barrels from its previous projection.

Oil has hovered in the upper-$80s this week reaching a two-year high of $90.76 US a barrel on Tuesday as traders have gauged how much demand may grow in 2011. The January oil futures contract closed Friday at $87.79, down 58 cents.

Officials of the 12-nation Organization of Petroleum Exporting Countries are likely to leave the group's production quotas unchanged at Saturday's meeting in Ecuador, the IEA said in its latest monthly report.

"Pre-meeting statements by OPEC ministers suggest the group is planning on a quick agreement to roll over existing output targets," said the report from the agency, which is the energy arm of the Organization for Economic Co-operation and Development, a grouping of the world's richest nations.

But "against a backdrop of much stronger-than-expected global oil demand growth, however, OPEC may come under pressure to increase supplies to the market in the new year if prices continue their relentless rise," the report said.

China oil demand up 12.6%

The agency said OPEC will likely need to produce 29.5 million barrels a day next year 100,000 daily barrels more than the IEA's previous estimate.

Preliminary data from China suggests that demand was up by 12.6 per cent in Octobercompared with a year earlier, the IEA said.

"The strength of China's oil demand is consistent with other indicators suggesting that the economy is in danger of overheating," the report said.

"Not only does GDP growth continue to hover around the 10 per cent mark, but inflation is also creeping up."