World oil demand will average 83.68 million barrels a day this year, down 2%, or 1.76 million barrels a day, from a year-earlier, the U.S. Energy Information Administration said Tuesday.
In 2010, demand is expected to mount a modest 0.9%, or 730,000 barrels a day, rise to 84.41 million barrels a day.
Forecasters raised their projections for global demand in the second and third quarters, but cut their fourth-quarter demand projection from the month-earlier forecast.
Second-quarter world oil demand is expected to average 82.87 million barrels a day, down 3.7%, or 3.2 million barrels a day, from a year earlier. In May, the EIA projected global second-quarter demand would be down 3.9%, or 3.39 million barrels a day.
Demand in the major industrialized nations comprising the Organization for Economic Cooperation and Development, will average 44.35 million barrels a day, down 2.74 million barrels a day, or 5.8%, from a year earlier. In May, the EIA projected the dropoff would be 6%, or 2.84 million barrels a day.
Second-quarter oil demand in China, the second-biggest oil consumer after the U.S., will average 8.17 million barrels a day, down from 8.19 million barrels a day a year ago. The EIA lifted its second-quarter Chinese demand projection by a slim 80,000 barrels a day from its May forecast.
Third-quarter world oil demand will average 83.97 million barrels a day, down 1.16 million barrels a day, or 1.4%, from a year earlier. Non-OECD growth of 380,000 barrels a day, led by a 170,000 barrels a day rise in Chinese demand, will partly offset a 1.54 million barrels a day decline in OECD demand.
In the fourth quarter, world demand will rise by 640,000 barrels a day, or 0.8%, from a year ago, to 84.73 million barrels a day. Non-OECD demand of 1.69 million barrels a day will more than offset a 1.04-million-barrel drop in non-OECD demand. China's demand will rise by 9.5%, or 710,000 barrels a day in the quarter, to 8.17 million barrels a day, the EIA projected. Still, that's a downward revision from the May expectation of fourth-quarter demand growth in China of 860,000 barrels a day, to 8.32 million barrels a day.
U.S. demand is expected to average 18.86 million barrels a day, the lowest in 12 years, and down 2.9%, or 550,000 barrels a day from a year earlier. In 2010, the EIA sees U.S. oil demand averaging 19.16 million barrels a day, up 1.6%, or 310,000 barrels a day, from 2009.
OECD company-held oil stockpiles stood at 2.7 billion barrels at the end of 2008, enough to cover 57 days of forward demand, and "well above average levels for that time of year," the EIA said.
Stock cover reached 60 days in the first quarter, rising by 46 million barrels, rather than posting a normal seasonal decline. The EIA shows estimated May inventories covering 63 days of forward OECD demand, and projects a return to 57 days of cover in December. "With the expected global demand increase in 2010 not forecast to be fully matched by increased supply, global inventories are expected to fall slightly" by the end of 2010, the EIA said.
Oil production from countries outside the Organization of Petroleum Exporting Countries is expected to rise by 400,000 barrels a day this year to 50.15 million barrels a day, and stay near that level in 2010. Higher output from Brazil, the U.S. and Azerbaijan, compared with 2008, is expected to offset declines in Mexico, the North Sea and Russia.