IEA says China oil demand increase is astonishing

The IEA has said that China’s demand for oil jumped by an astonishing 28% in January 2010 compared with the same month a year earlier. The IEA added that demand for oil in 2010 would be underpinned by rising demand from emerging markets, with half of all growth coming from Asia.

But the IEA predicted demand in developed countries would fall by 0.3%. The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day. Oil prices are currently at their highest point for two months, with US light, sweet crude above $82 a barrel and Brent crude more than $80 a barrel.

The IEA said the high price level was due to “heightening of geopolitical tensions affecting some producing countries”, but that this had been balanced by “ample physical oil supplies”.

The Paris based IEA on Friday revised up by 70,000 barrels a day its oil demand forecast for both 2009 and 2010, saying that higher-than-expected non-OECD data largely offset persistently weak OECD readings.

“Chinese officials have made it clear that the government will continue to foster strong economic growth as long as inflation remains moderate, thus raising the possibility of potential upside sensitivity for the country’s oil demand outlook,” the IEA said.

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IEA says China oil demand increase is astonishing