IEA forecasts slower oil demand growth in 2011

By Emma Farge

LONDON (Reuters) - Global oil demand growth will slow next year, leaving the market with comfortable supplies until at least the middle of 2011, the International Energy Agency said in its monthly Oil Market Report on Tuesday.

The step change in demand growth between now and next year can be attributed to less government money being pumped into the economy to support growth, David Fyfe, head of the IEA's Oil Industry and Markets Division told Reuters.

"The key element is the gradual scaling back of economic stimulus programmes which we are assuming takes place over the next 12-15 months," Fyfe said in an interview with Reuters Insider TV.

"That's taking a little of the post-recessionary froth out of the market."

Global oil demand will grow by 1.35 million barrels per day (bpd) next year to 87.84 million bpd, the IEA, which advises 28 industrialised countries, said in its first 2011 demand projection in a monthly report.

That compared with demand growth of 1.77 million bpd expected this year -- a figure the IEA revised up by 80,000 bpd in Tuesday's report from its June estimate.

Earlier this month, the U.S. Energy Information Administration lifted its projection for 2010 world demand growth to 1.56 million bpd.

The Organization of the Petroleum Exporting Countries (OPEC) is expected to release its own monthly report on Thursday.