World oil demand will rise more quickly than previously thought this year, the International Energy Agency said on Tuesday, adding weight to consumer nations' calls for more OPEC oil. In its June monthly report, the adviser to 26 industrialised countries lifted its forecast for 2007 growth in world oil demand to 1.7 million barrels per day (bpd) or two percent, up 200,000 bpd from the previous forecast.
The report marked the fourth month running the Paris-based agency has urged the Organization of the Petroleum Exporting Countries to open the taps to lower prices that are close to $70 a barrel, up from about $50 in January.
"We would very much hope that OPEC production is at its seasonal low at the moment," said David Fyfe, analyst at the IEA. "We definitely do need more crude oil."
The increase in the IEA's demand forecast reflects revisions to 2005 data and higher-than-expected demand in countries including Nigeria, Indonesia, Singapore, Venezuela and former Yugoslavia.
Fuel inventories in the industrialised countries that are members of the Organisation for Economic Co-operation and Development fell in the first quarter as the impact of OPEC supply cuts kicked in.
While inventories rose by 9.9 million barrels in April, the IEA warned the trend may reverse should the 12-member OPEC maintain production close to current rates. If the group pumps around 30.3 million bpd -- or 200,000 bpd more than the IEA estimates they produced in May -- stocks could drop by 1 million to 1.5 million bpd in the third quarter, the report said.
"This would push forward stock cover down towards the low levels seen when prices accelerated higher in 2004. That is, by itself, a concern."
OPEC, source of more than a third of the world's oil, agreed last year to lower output by 1.7 million bpd and officials from the group have consistently said crude supply is enough.
Iran's Oil Minister Kazem Vaziri-Hamaneh said on Monday there is no shortage of crude oil in the market and OPEC has no plans to increase supplies.