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Stronger global growth boosts oil use: EIA

WASHINGTON (Reuters) - The global economic recovery will push world oil demand sharply higher in 2010, the U.S. Energy Information Administration said on Tuesday as it increased its demand growth forecast for a second consecutive month.

The U.S. government’s top energy forecasting agency increased its estimate for world petroleum demand growth this year by 270,000 barrels per day to 1.5 million bpd, pushing global fuel use to an average 85.51 million bpd.

Last month the agency raised its 2010 demand growth forecast by 120,000 barrels per day for an increase in oil demand of 1.2 million barrels per day in 2010.

Most of the higher oil demand will occur in developing countries, particularly in Asia and the Middle East.

The agency said it now expects the world economy will grow 3.4 percent this year, more than the 2.7 percent it forecast last month.

For 2011, global oil demand is expected to increase by 1.55 million bpd to 87.06 million bpd.

In the United States, the world’s biggest petroleum consumer, oil demand is expected to rise 200,000 bpd to 18.89 million bpd in 2010. This is up 30,000 bpd from the agency’s previous forecast

EIA forecasts the American economy will grow 2.8 percent this year, more than its previous estimate of 2.3 percent.

The agency revised down its U.S. oil demand growth forecast for 2011 by 10,000 bpd, even though total U.S. oil consumption is expected to rise 210,000 bpd next year.

Despite the increase in fuel consumption, EIA said U.S. oil demand in 2011 will still be 1.7 million bpd less than the peak reached in 2005.

On the supply side, the EIA raised its forecast for non-OPEC crude oil production growth this year by 120,000 bpd.

In its new monthly energy forecast, the EIA said it now expects non-OPEC oil output to increase by 550,000 bpd this year to an average 50.82 million bpd.

The largest source of supply growth in 2010 is the United States, followed by Brazil, Azerbaijan, and Kazakhstan, which will offset further declines in mature fields in Mexico, the United Kingdom, and Norway, the agency said.

The EIA said it does not expect OPEC will change its target oil output levels when the producer groups meets next week. However, the agency said it expects OPEC oil output to increase by 400,000 bpd this year to 29.50 million bpd.

Reporting by Tom Doggett and Ayesha Rascoe; editing by Jim Marshall

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