By the OGJ Online Staff
LONDON, May 11 -- The International Energy Agency Friday downgraded its forecasts for global oil demand for the sixth straight month, stressing that higher oil prices and the slowdown in Western economies would cap demand growth at just over 1 million b/d this year.
Demand is expected to climb to a little more than 76.5 million b/d this year, 160,000 bbl short of last month's prediction, the Paris-based agency said its latest monthly oil report.
The IEA noted that demand in the first quarter of the year had fallen short of its earlier expectations by more than 500,000 b/d, while still growing by 1.1 million b/d.
World oil production fell by 900,000 b/d to 77.1 million b/d last month, according to IEA figures, largely due to Organization of Petroleum Exporting Countries' crude supply being 560,000 b/d lower.
Though Iraqi output rose by 280,000 b/d, production by the so-called OPEC-10 states declined by 840,000 b/d to 24.9 million b/d -- still 700,000 b/d higher than the 24.2 million b/d output target set at the organization's March ministerial meeting.
Organization for Economic Cooperation and Development countries' production was also down by 270,000 b/d, which IEA said was the result of scheduled maintenance in the North Sea and the usual spring thaw and road restrictions in Canada.
IEA tried to calm fears of a gasoline crisis during North America's summer driving season, noting that, with historically wide crack-spreads and margins, throughputs should surge and increase product deliveries from Atlantic Basin refineries returning from planned maintenance.
"Refiners appear to be better positioned this year than last to deal with the current situation," reported the IEA. "They have demonstrated increased operating flexibility to meet product demand, exceeding what had been considered to be maximum production yields of gasoline for the summer driving season and distillates for the winter heating season."
However, IEA cautioned that while there were early signs that OECD crude stocks were building -- by 1.43 million b/d, a figure largely offset by a 830,000 b/d draw on product stocks -- the availability of oil to meet peak summer demand is "anything but certain."
The IEA said the supply uncertainty stemmed from an imminent convergence of factors: the start-up of North Sea maintenance programs, Iraq's re-entry into another round of oil-for-food negotiations with the United Nations, and OPEC's June meeting
