Despite IEA’s cut in global outlook for 2011, strong Chinese imports to support oil demand

The slump in oil prices this week amid weaker economies, has led the International Energy Agency (IEA) to cut its global outlook for 2011 by 60,000 bpd than previously projected. Oil prices have dipped by almost 15% this month, amid concerns of global growth that has kept investors sidelined. However, analysts believe that fundamentals in Asia remain strong enough to reinvigorate energy demand, as per MarketWatch. Global oil demand is expected to average 89.5 mln bpd in 2011, rising to 91.1 mln bpd in 2012. The agency also pruned its 2011 forecasts for China’s daily oil demand by 80,000 bpd, to 9.62 mln, on the back of slowing manufacturing growth and high domestic fuel prices. However, this would still mark a rise for last year’s levels, which averaged 9.07 million bpd, according to the IEA. nThe IEA also revised down its 2012 China forecasts by 50,000 bpd, to 10.13 mln barrels. However, a spike in Japanese demand following the disruption to nuclear facilities in the wake of the March earthquake and tsunami is expected to offset some the moderation in Chinese demand. The IEA raised its estimate for Japanese demand in 2012 by 70,000 bpd. Demand from Asia’s other emerging markets represent further positive upside for oil over the medium to longer term.
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