Oil Report

UPDATE 1-IEA head says no plans to cut oil demand forecast

* Sees supplies down 1.7 mln bpd

* Oil inventories very high

* No plans to change forecast in May report

(Adds details)

WARSAW, May 12 (Reuters) - The International Energy Agency (IEA) is unlikely to reduce its oil demand forecast in its next report, its chief said on Tuesday.

Oil production will fall this year, IEA Executive Director Nabuo Tanaka also told reporters in Warsaw.

“According to our forecasts non-OPEC supply will be reduced by half a million barrels per day in 2009 and on the whole production will be down 1.7 million barrels per day,” he said.

“Current inventories are very high and that helps easing the market at the moment. Because demand is so weak the inventories of over 60 days are a bit exaggerated,” he said.

Last month the IEA said it expected total demand to fall by 2.4 million bpd this year, a big reduction from 1.25 million in the agency’s previous monthly report.

The IEA, energy adviser to 28 developed countries, will release its next monthly oil market report in mid-May. (Reporting by Patryk Wasilewski, writing by Chris Borowski)