By Tom Doggett and Ayesha Rascoe
WASHINGTON, Dec 8 (Reuters) - The U.S. Energy Information Administration on Tuesday lowered its forecast for global oil demand next year, indicating a weaker recovery from leading consumers such as the United States.
World oil consumption in 2010 is now expected to increase 1.1 million barrels per day to 85.22 million bpd. Last month, the agency thought global petroleum consumption would grow 1.26 million bpd to 85.40 million bpd.
The lower demand numbers from the Energy Department's forecasting arm surprised some oil market participants.
'People were looking for U.S. oil demand to be higher, and so with the cut in the EIA forecast and a smaller increase overall, that's a little disappointing,' said Mark Waggoner, president of Excel Futures in Huntington Beach, California.
'In any case, the EIA forecast is always revised and the likelihood is that they will show higher demand going forward,' he said.
For the United States, the world's biggest oil user, the EIA cut 2010 demand by 40,000 bpd to 18.97 million bpd, though that would still be 270,000 bpd higher than this year's demand. The agency also slashed next year's oil demand estimate for China by 50,000 bpd to 8.61 million bpd.
The report 'tells us things are getting better, it just also says they're not getting better quickly,' said Peter Beutel, president of Cameron Hanover in New Canaan, Connecticut.
Beutel said there has been an expectation that gains in the economy would translate into strong oil demand growth, 'but we have yet to see any real sign of that.'
Phil Flynn, analyst at PFG Best Research in Chicago, said the EIA's forecast shows as the economy recovers, U.S. consumers will be smarter in how they use energy by buying more fuel-efficient vehicles and living in energy-efficient homes. He also said the industrial sector probably won't recover fully from the recession, which means less energy use.
'The oil demand bounce back isn't as robust as we thought,' Flynn said. 'I think people are starting to realize that some of the demand destruction we've experienced may be permanent.'
To see a graphic on EIA's global oil demand forecast, click here: http://link.reuters.com/rup75g
While demand will be lower than previously expected, the EIA sees bigger petroleum supplies available in the market.
The agency raised its projection for oil output from non-OPEC countries in 2010 to 50.45 million bpd from its previous forecast of 50.43 million bpd.
'Non-OPEC oil production increases have been largely the result of higher production from the United States, Brazil and the former Soviet Union,' the agency said. 'Oil production in Colombia has also been surprisingly strong.'
The EIA also raised its forecast for OPEC crude oil production next year to 29.59 million barrels per day from its prior estimate of 29.44 million bpd due to an expected rebound in global oil demand.
The EIA said it expects the price of West Texas Intermediate crude oil to average $76 a barrel this winter, down $1 from its prior forecast. The WTI price is projected to average $82 by end of next year, up $1 from the agency's previous estimate.
The EIA will release its first supply and demand forecast for 2011 in its next monthly energy outlook that will be released Jan. 12.
(Additional reporting by Timothy Gardner in Washington and Gene Ramos in New York; Graphic by Stephen Culp; Editing by Marguerita Choy)
((tom.doggett@thomsonreuters.com; + 1 202 898-8320; Reuters Messaging: tom.doggett.reuters.com@reuters.net))Keywords: EIA MONTHLY/OIL (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Dec 8 (Reuters) - The U.S. Energy Information Administration on Tuesday lowered its forecast for global oil demand next year, indicating a weaker recovery from leading consumers such as the United States.
World oil consumption in 2010 is now expected to increase 1.1 million barrels per day to 85.22 million bpd. Last month, the agency thought global petroleum consumption would grow 1.26 million bpd to 85.40 million bpd.
The lower demand numbers from the Energy Department's forecasting arm surprised some oil market participants.
'People were looking for U.S. oil demand to be higher, and so with the cut in the EIA forecast and a smaller increase overall, that's a little disappointing,' said Mark Waggoner, president of Excel Futures in Huntington Beach, California.
'In any case, the EIA forecast is always revised and the likelihood is that they will show higher demand going forward,' he said.
For the United States, the world's biggest oil user, the EIA cut 2010 demand by 40,000 bpd to 18.97 million bpd, though that would still be 270,000 bpd higher than this year's demand. The agency also slashed next year's oil demand estimate for China by 50,000 bpd to 8.61 million bpd.
The report 'tells us things are getting better, it just also says they're not getting better quickly,' said Peter Beutel, president of Cameron Hanover in New Canaan, Connecticut.
Beutel said there has been an expectation that gains in the economy would translate into strong oil demand growth, 'but we have yet to see any real sign of that.'
Phil Flynn, analyst at PFG Best Research in Chicago, said the EIA's forecast shows as the economy recovers, U.S. consumers will be smarter in how they use energy by buying more fuel-efficient vehicles and living in energy-efficient homes. He also said the industrial sector probably won't recover fully from the recession, which means less energy use.
'The oil demand bounce back isn't as robust as we thought,' Flynn said. 'I think people are starting to realize that some of the demand destruction we've experienced may be permanent.'
To see a graphic on EIA's global oil demand forecast, click here: http://link.reuters.com/rup75g
While demand will be lower than previously expected, the EIA sees bigger petroleum supplies available in the market.
The agency raised its projection for oil output from non-OPEC countries in 2010 to 50.45 million bpd from its previous forecast of 50.43 million bpd.
'Non-OPEC oil production increases have been largely the result of higher production from the United States, Brazil and the former Soviet Union,' the agency said. 'Oil production in Colombia has also been surprisingly strong.'
The EIA also raised its forecast for OPEC crude oil production next year to 29.59 million barrels per day from its prior estimate of 29.44 million bpd due to an expected rebound in global oil demand.
The EIA said it expects the price of West Texas Intermediate crude oil to average $76 a barrel this winter, down $1 from its prior forecast. The WTI price is projected to average $82 by end of next year, up $1 from the agency's previous estimate.
The EIA will release its first supply and demand forecast for 2011 in its next monthly energy outlook that will be released Jan. 12.
(Additional reporting by Timothy Gardner in Washington and Gene Ramos in New York; Graphic by Stephen Culp; Editing by Marguerita Choy)
((tom.doggett@thomsonreuters.com; + 1 202 898-8320; Reuters Messaging: tom.doggett.reuters.com@reuters.net))Keywords: EIA MONTHLY/OIL (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.