WASHINGTON/LONDON The International Energy Agency cut its global oil demand growth projection on Wednesday while the U.S. government increased its outlook for 2012, making it the most bullish forecaster as the economy heads into an uncertain year.
The U.S. Energy Information Administration's outlook for oil demand growth next year was much stronger than the Paris-based IEA's projection and the forecast issued by the Organization of the Petroleum Exporting Countries on Tuesday.
Both the EIA and IEA stressed the risks to growth as economic conditions darken, but the wide gaps on growth prospects -- including the most bearish from OPEC itself -- underscored the depths of uncertainty facing traders.
Oil prices were little changed as the revisions to the trio of benchmark forecasts did little to alter the perception that overall, oil demand continues to hold up relatively well.
Brent crude oil has risen nearly 13 percent in the past six days, rallying back from near their lowest this year.
While economic conditions have forced the agencies to lower their demand projections, they still have stopped short of forecasting another recession, said Matt Smith, an analyst at Summit Energy, a subsidiary of Schneider Electric.
"They still see strength in global oil market, that's why we see these expectations for continued oil demand growth," Smith said. "It's just being tempered somewhat with this economic uncertainty."
The IEA, an adviser to 28 industrialized countries, lowered its global fuel demand growth forecast for 2011 by 50,000 barrels per day to 990,000 bpd. Next year, the IEA said world oil consumption will expand by 1.25 million bpd, 160,000 bpd less than previously expected.
"We're seeing indications of weaker demand in markets like the Middle East, China and the U.S.," David Fyfe, head of the IEA's Oil Industry and Markets Division, told Reuters.
"If we are in double-dip territory, which is not our base case, we would be looking at much weaker demand growth."
The EIA, which made deep cuts to its demand outlook a month ago, made more modest adjustments to its forecast, curbing its estimate for world oil demand growth this year by 50,000 barrels per day and boosting next year's growth rate by the same amount.
The agency now expects world consumption to grow 1.32 million bpd to 88.4 million bpd this year, and a further 1.44 million bpd in 2012.
OPEC, which pumps a third of the world's oil, forecast 2011 demand growing by just 0.88 million bpd to 87.81 million bpd. It is the first time this year that OPEC has cut its oil demand growth estimate to below 1 million bpd. For 2012, it cut demandby 70,000 bpd to 1.19 million bpd.
The IEA's report also added to signs that top oil exporter Saudi Arabia was trimming production now that Libyan oil has started to return to the market. It said overall OPEC output dipped by just 20,000 bpd last month as lower production from Saudi Arabia and Nigeria offset the restart of supplies in Libya.
The IEA said calls by OPEC countries including Iran -- which opposed the increase in supplies -- for other OPEC members to cut output looked "premature" as production remains below the IEA's forecast of fourth-quarter demand for OPEC oil of 30.8 million bpd.
Olivier Jakob, oil analyst at Petromatrix, said he expects a further fall in Saudi output next year to prevent inventories filling up as Libyan supply recovers.
"Saudi Arabia will have to cut more in 2012 to prevent a stock build," he said. "There is no doubt that it will given that it unilaterally increased production following the shutdown of Libya."
In its forecast, the EIA cut non-OPEC oil production this year to 52.27 million bpd, down 10,000 bpd from last month's report.
Oil output from non-OPEC countries is projected to rise by 50,000 bpd to 53.11 million bpd in 2012, according to the EIA. Much of this growth will come from countries such as Brazil, Canada, China and the United States, with average supply growth of more than 100,000 bpd in each nation.
But, the rise in oil demand from developing nations is still set to outpace the increase in production from non-OPEC countries, the EIA said.
"We do envision the need for additional supply from OPEC and for some draw on stocks to satisfy the level of demand we're forecasting," acting EIA administrator Howard Gruenspecht said in an interview with Reuters Insider.
(Editing by Marguerita Choy)