Oil and Gas

UPDATE 2-US EIA cuts forecast of 2011 world oil demand growth

 * World oil demand growth for 2011 revised down slightly
 * China, Brazil, Middle East to drive demand next year
 * China demand revised up by 50,000 bpd for 2010, 2011
 (Adds higher non-OPEC and OPEC oil output, U.S. winter heating
fuel costs)
 WASHINGTON, Oct 13 (Reuters) - The U.S. government lowered
its forecast of growth in world oil demand for 2011 on
Wednesday, but expects developing countries to keep boosting
global petroleum consumption.
 World oil demand is expected to rise 1.38 million barrels
per day next year to 87.44 million bpd, the Energy Information
Administration said, down slightly from the 1.41 million bpd
increase that it projected last month.
 Developing regions such as China, Brazil and the Middle
East are expected to be the main drivers of oil demand in
 In its new monthly report, the EIA raised its forecast for
growth in world oil demand in 2010 by 110,000 bpd, with
consumption now expected to climb 1.73 million bpd to 86.06
million bpd.
 The revision is in response to stronger-than-expected
growth in oil demand in China and developed countries during
the first half, the agency said.
 China's oil demand was revised up by 50,000 bpd for 2010
and 2011, with fuel use seen at 9.02 million bpd and 9.55
million bpd, respectively.
 On the supply side, the EIA raised its forecast for
non-OPEC crude oil production growth this year by 200,000
barrels per day from the agency's prior estimate.
 The agency said it now expected non-OPEC oil output to
increase 900,000 bpd this year to an average 51.36 million
 Most of this year's production growth will come from the
United States, Brazil and the former Soviet Union, the EIA
 For 2011, the EIA increased its forecast decline in
non-OPEC oil output by 80,000 bpd, with production now seen
dropping 240,000 bpd to an average 51.12 million bpd.
 Next year's drop will be due to declining North Sea and
North American production -- with Mexico's output falling
170,000 bpd -- as well as decreasing supplies from Russia.
 "This would be only the third time in the last 15 years
that non-OPEC supplies fail to grow year-over-year, following
non-OPEC production declines in 2005 and 2008, which were
mainly the result of supply disruptions in the Gulf of Mexico,"
the EIA said.
 U.S. oil production from the Gulf of Mexico is expected to
drop next year by 170,000 bpd, about 50,000 bpd higher than the
agency forecast last month.
 The decline partly reflects lost production from a
deepwater-drilling moratorium imposed after the BP BP.L oil
 The U.S. Interior Department ended the drilling ban this
week, but new safety rules will likely delay the issuance of
new drilling permits until near the end of this year.
 The EIA forecast OPEC crude production to gain slightly, up
300,000 bpd in 2010 and 600,000 bpd in 2011, to accommodate
increasing consumption and keep oil prices from rising
 OPEC ministers meet this week to discuss oil market
 The EIA expects U.S. oil prices to average about $80 a
barrel this winter, up $2.50 from last year, and then gradually
rise to $85 by the fourth quarter of 2011 as the U.S. and
global economies improve.
 The agency said average heating fuel costs this winter for
U.S. households would increase 2.5 percent, or $24, from last
 It will cost more to heat with heating oil (up 12 percent),
natural gas (up 4 percent) and propane (up 8 percent), but less
with electricity (down 2 percent), the EIA said.
(Reporting by Ayesha Rascoe and Tom Doggett; editing by Dale
Hudson and Jim Marshall)