The U.S. Energy Information Administration on Tuesday cut its forecast for 2009 world oil demand by 180,000 barrels per day from its prior March estimate to 84.09 million bpd, as the global economy is expected to shrink 0.8 percent this year.
In its new monthly energy forecast, the agency said it then expects world oil demand in 2010 to increase to 85.22 million bpd, 70,000 bpd higher than it forecast last month, driven by a recovery of global economic growth to 2.6 percent.
"Higher oil prices, as well as the change in market sentiment to a slightly less pessimistic outlook, may also reflect the market's belief that economic recovery policies from central banks and governments have slowed down the decline in demand and even improved the chances for an economic upturn and, consequently, higher oil demand, later this year," EIA said.
The EIA has slashed its estimate for 2009 global oil demand in 12 out of its last 15 monthly forecasts.
For the United States, which is the world's biggest petroleum consumer, EIA cut its forecast for oil demand this year by 10,000 bpd to 18.99 million bpd.
However, the agency's estimate for U.S. oil consumption in 2010 was raised by 60,000 bpd to 19.27 million bpd thanks to the expected economic recovery.
Separately, EIA projected OPEC crude oil production to be 130,000 bpd less this year from earlier estimates to 28.78 million bpd.
"Lower crude oil production by members of the Organization of the Petroleum Exporting Countries has lowered world petroleum supplies, substantially offsetting reduced oil demand caused by the global economic recession," the EIA said.
Non-OPEC oil output is seen averaging 49.77 million bpd in 2009, up 10,000 bpd from the EIA's prior forecast.
"The prospects of limited growth in non-OPEC production and the expected start of economic recovery later this year, that should increase oil consumption and the demand for OPEC oil, are the main factors supporting the upward price path" for crude oil prices, the agency said.
U.S. crude oil prices are forecast to average $53 a barrel this year because of the global economic slowdown, and assuming there is an economic recovery in 2010 oil will rise to an average $63 next year, the EIA said.
