IEA raises oil demand forecast

The International Energy Agency on Tuesday raised its forecast for world oil demand for 2011.

The Paris-based agency predicted demand will rise to 89.1 million barrels a day, up from 87.7 million in 2010.

The IEA based the change on recharged global economic growth and a cold winter in the Northern Hemisphere that is leading to more consumption of heating oil.

Last month, the IEA forecast 2011 oil demand would hit 88.8 million barrels a day.

The Organization of Petroleum Exporting Countries, in its monthly report also released Tuesday, raised slightly its demand forecast.

OPEC predicted demand for its crude is expected to average 29.4 million barrels a day in 2011, an increase of 0.4 million over 2010 and an increase of 0.2 million over the previous assessment, the Vienna-based group said.

Oil traders shrugged off both reports, with the February contract closing down 16 cents to $91.38 US a barrel on the New York Mercantile Exchange.

Some analysts have predicted that speculation could drive oil prices beyond $100 US a barrel. It seemed that the current rally would fall short of that.

"The market clearly lacks the drive to run at the $100 mark at the moment," said analysts at Commerzbank in Frankfurt.

"Given the substantial overhang of speculative long positions, we could see profit-taking, which could result in a further decline in the price of crude oil."