Oil demand increasing, says energy watchdog

PARIS - Agence France Presse

The IEA, Western countries’ energy watchdog, slightly raised its outlook for growth of oil demand this year, but warned on May 11 that risks of a shock from Iran persist, despite easing prices and a supply boost by OPEC.

The International Energy Agency said oil demand in 2012 would increase by 0.8 million barrels per day (mbd) to 90.0 mbd, with consumption in emerging countries “more than offsetting” declining demand in richer OECD countries.

The IEA noted that oil prices had dropped sharply in April amid poor economic data from the US and Europe and an apparent easing of tensions between Iran and the West.

The IEA said that OPEC nations had begun to boost oil supplies in April in order to meet any potential supply shocks owing to tensions with Iran. But despite easing tensions on the market, the IEA said “there is no room for complacency: the path of market fundamentals for the rest of the year remains highly uncertain and geopolitical risks will likely continue to keep prices high.”

Oil prices fell in Asian trade Friday, weighed down by disappointing Chinese trade data and the increase in crude production by the OPEC cartel, analysts said.

 New York’s main contract, West Texas Intermediate crude for delivery in June, was down 96 cents to $96.12 per barrel while Brent North Sea crude for June shed 84 cents to $111.89 in the afternoon.