EIA may raise oil demand forecast on better economy

WASHINGTON (Reuters) - A slightly brighter economic outlook may prompt the U.S. Energy Information Administration to bolster its world oil demand forecasts in the August report it is releasing on Tuesday.

The EIA report comes on the heels of a government report that the United States shed a less than expected 247,000 jobs in July, the least in any month since August 2008. Also, the U.S. unemployment rate eased to 9.4 percent from 9.5 percent in June.

After months of major downward revisions, the EIA has increased its 2009 world oil consumption projection in its last two reports. Analysts say they expect this trend to continue in this month's report, due out at noon EDT (1600 GMT), as the economic picture becomes less gloomy.

"I think we're probably going to acknowledge in that report an improvement in the economy, somewhat," said Phil Flynn, energy analyst with PFGBest Research.

"I think this is going to acknowledge the fact that we're starting to see some green shoots on the energy demand side and that should keep the market up a little bit," he added.

In its July outlook, the EIA raised its 2009 global oil demand projection to 83.85 million barrels per day from the previous forecast of 83.68 million bpd - still well below 2008 levels of 85.41 million bpd.

Expectations that an economic recovery could lift fuel consumption have pushed oil prices from below $33 a barrel in December to around $70 this month.

Oil traders will also continue to monitor the outlook for changes in oil demand from China, one of the key drivers of oil's six-year rally that sent prices up to near $150 a barrel last year.

"You will see pricing pressure coming from a resilient domestic economy in China that is pushing up Chinese demand," said Brad Samples, analyst at Summit Energy.

Samples said global distillate demand is also a key figure to watch because diesel consumption is tied to industrial output.

"That will be our key indicator to show that demand destruction has indeed halted for the entire crude complex," he said.

Joseph Arsenio, managing director of Arsenio Capital Management in Larkspur, California, said he does not expect to see much change in EIA's global oil demand forecast.

"They're probably going to be disinclined to reduce the outlook, because of course it does appear the economy is beginning to strengthen," Arsenio said. "But we just haven't gotten the results in the actual consumption side...which would cause them to make an upward revision."

Along with the EIA, OPEC will also be releasing its monthly oil consumption forecast Tuesday, followed by the International Energy Agency on Wednesday.

(Reporting by Ayesha Rascoe; Editing by Lisa Shumaker)