IEA cuts 2012 oil demand growth forecast

Mild weather in the northern hemisphere this winter and a rising likelihood of a sharp economic slow-down will likely lead to lower global oil demand growth in 2012, the International Energy Agency said.

It cut its 2012 global oil demand growth forecast by 220,000 barrels per day (bpd) from its previous monthly report to 1.1 million bpd.

"Euro zone indebtedness has not gone away, as downgrades to the credit ratings of a number of major economies testify," the IEA, the energy agency for industrialised nations, said in a monthly report.

"Upcoming revisions to the GDP forecasts of the IMF and other institutions might result in much weaker growth still, even if not to ...zero growth," it said.

The IEA said oil prices remained at elevated levels above $100 a barrel because of worries about production in Nigeria, Iraq and Iran.

"At least a portion of Iran's 2.5 million barrels per day crude exports will likely be denied to OECD refiners during second half 2012, although more apocalyptic scenarios for sustained disruption to Strait of Hormuz transits look less likely," it added.