UPDATE 4-Oil falls below $115 on IEA weaker oil demand view


* IEA cuts 2011-1016 global oil demand growth

* BP to export U.S. crude to Canada, Shell seeks permit

* Turkey-Syria tensions, lower N.Sea output support

(Updates prices, adds comment, detail; paragraphs 3, 11, 14-17)

By Alice Baghdjian

LONDON, Oct 12 (Reuters) - Oil fell below $115 a barrel onFriday, as a prediction of a further decline in oil consumptionand higher supplies offset concerns about potential outputdisruptions in the Middle East.

The International Energy Agency (IEA) said ample supply fromNorth America and Iraq coupled with declining global demandcould lead to an easing of oil prices over the next five years.

Brent crude had fallen 75 cents to $114.96 a barrelby 1055 GMT. U.S. crude was down 2 cents at $92.05.

The IEA cut its global oil demand growth projection for2011-2016 by 500,000 barrels per day (bpd) compared to itsprevious report, easing the pressure on OPEC to produce moreoil.

It also cut its 2013 global oil demand projection by 100,000bpd to 90.48 million bpd, citing lower consumption in Europe,the Americas and China.

"It seems like the market has reacted on the negative side.Crude oil prices reversed from yesterday's gains amid concernsover confirmation of the global oil demand growth," said MyrtoSokou, a senior research analyst at Sucden Financial.

"The bearish IEA figures set the tone for the day so we canexpect further declines for today's trading session," Sokousaid.

Oil major BP Plc has secured U.S. governmentpermission to ship U.S. crude oil to Canada, and Royal DutchShell has applied for an export license, as risingproduction in the world's top oil consumer upends global energyflows.

"This will significantly alter the oil market dynamics inthe coming years as U.S. crude imports are expected to declineand exports to rise," said Ryoma Furumi, a commodity salesmanager at Newedge Japan.

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But geopolitical risks, lower output in the North Sea due tomaintenance and a supply crunch in oil products are propping upoil prices in the face of dwindling global fuel demand.

More than a week of rising tension between Turkey and Syriahas stoked fears over potential disruption of oil supply fromthe region. The port of Ceyhan, through which more than 400,000barrels per day of Iraqi crude flows, is on the TurkishMediterranean coast.

Syria accused Turkey of "air piracy" on Thursday afterAnkara grounded a Damascus-bound passenger plane it said wascarrying munitions.

"At current oil prices, it will not be domestic demand thatwill lead oil prices higher on a sustained basis but lack ofsupply," said Olivier Jakob, at Petromatrix in Switzerland.

"This means that we are heading towards a period of greatervolatility, because when and if the fears on supply disappearthere will not be the support of demand," he said.

Distillate stocks in the United States fell sharply lastweek and figures on Thursday showed gasoil stocks independentlyheld in the Amsterdam-Rotterdam-Antwerp hub fell almost 4percent week-on-week.

"ARA gasoil stocks in Western Europe are at their lowestlevel for nearly a year," Commerzbank said in a note."Distillate prices are therefore likely to rise further ahead ofthe heating season."

(Additional reporting by Florence Tan in Singapore, Editing byWilliam Hardy)

((Alice.Baghdjian@thomsonreuters.com)(+44 207 542 7714))

Keywords: MARKETS OIL/