Oil demand slowing, market more balanced: IEA

By Muriel Boselli and Tom Bergin

PARIS (Reuters) - The world oil market is becoming more balanced, demand is falling and oil prices should soften as a result, International Energy Agency (IEA) Executive Director Nobuo Tanaka said on Thursday.

OPEC's research director also said U.S. demand was falling and other countries would also use less oil, depending on the extent of fall-out from a weaker U.S. economy.

"Demand is slowing down .... we are moving towards a more balanced market," Tanaka told Reuters on the sidelines of a conference in Paris.

Tanaka said oil prices, which hit a record of $112.21 for U.S. crude on Wednesday were too high, but he said softer demand and increasing stocks should bring down prices.

Asked whether the Organization of the Petroleum Exporting Countries (OPEC) should raise its output, the IEA head said oil inventories should rise if the group kept pumping at current levels.

"If they continue the current level of production, we will see stocks replenishing, so the current level of production will have to continue," he said.

OPEC's head of research Hasan Qabazard also said on the sidelines of the same conference that demand was falling in the world's biggest energy consumer the United States.

"There is lower gasoline demand in the States which is translating into lower crude (demand), roughly 400,000-450,000 barrels per day," he told reporters.