IEA oil demand growth estimates send crude prices higher

Oil prices were slightly higher on Tuesday the International Energy Agency increased its predictions of global growth of demand for oil this year. Previously, the IEA had said non-OPEC demand would grow by 3.2 percent, above its previous estimate of demand growth of 3 percent in 2007. Most of that growth, according to the IEA, will be accounted for by more demand in China. The new IEA numbers have Chinas demand estimated at 7.6 million barrels per day this year, up from 7.1 million barrels per day in 2006.

In addition to a growth in demand, the IEA says that non-OPEC supply growth will be less than earlier estimated. It says that non-OPEC supply will grow by 70,000 barrels per day to 50.5 million barrels per day. Those numbers translated into 2.2 percent supply growth from non-OPEC sources. The IEA said that any further production cuts from the OPEC nations could tighten supplies substantially.

After declines early in the session, Brent crude for March delivery added 50 cents to $57.10 per barrel late in the afternoon in London. March contracts for West Texas Intermediate was up 70 cents to $58.51 by early afternoon on the New York Mercantile Exchange.