World oil demand will grow more quickly in 2008, although higher production and refinery capacity should ease pressure on supply, the International Energy Agency (IEA) said today.
In its monthly report, the adviser to 26 industrialised countries said demand will rise by an average 2.2 million barrels per day (bpd) in 2008, up from this year's expansion of 1.53 million bpd.
The outlook comes as oil prices are trading above $76 a barrel, closing in on a record high near $79, on concern of a tightening market. Next year's supply and demand balance should be more comfortable, the IEA said.
Oil demand next year will average 88.2 million bpd, the agency said. It cut expected demand growth this year by 140,000 bpd to 1.53 million bpd after receiving new data for 2006.
Most of the growth will be outside the OECD group of industrialised nations such as in China and the Middle East, the IEA said. It also assumes higher OECD demand from a return to normal winter weather.
The report is the second major assessment of the oil market this week from the Paris-based IEA.
In its medium-term oil market report on Monday, it warned of a looming supply crunch as demand rises faster than expected to 2012 while supply lags. That outlook sent prices higher.