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. Last Updated: 07/27/2016

Oil Demand to Increase

LONDON -- World oil demand will increase by 1.2 million barrels per day in 1995 from 1994 levels, on top of an 800,000 bpd rise from 1993, the International Energy Agency said Thursday.

For the rest of this year, fast-growing demand will help underpin oil prices and may push OPEC into increasing production levels when it meets again in November, oil analysts added.

Low crude-oil stock levels also should support oil prices, leaving little downside potential with the approach of the period of high demand in the northern-hemisphere winter.

"Strong demand and static supply from OPEC almost inevitably mean that stocks will tighten over the rest of the year," said Steve Terry at the London consultancy Petroleum Economics Ltd.

"We expect Brent prices to peak at $20 to $21 a barrel some time later in the year," Terry said.

North Sea Brent Blend crude, a benchmark for world oil prices, is currently trading at about $18.60, having firmed almost $6 up from a five-year low in late February.

The International Energy Agency, the West's Paris-based energy watchdog group, said economic growth among many of the world's major consumers would push world oil demand to 69.3 million barrels per day on average next year from 68.1 million this year.

Winter demand in the first quarter of next year will hit 70.2 million bpd, driven by continued strong economic growth in Asia and further economic recovery in Europe.

Commercial stocks held in Organization for Economic Cooperation and Development nations at the end of June were 32 million barrels below last year, down by the equivalent of two days' consumption.