The International Energy Agency (IEA) said on Tuesday that global demand for oil would amount to 83.4 million barrels per day in 2005 and 85.2 million barrels per day in 2006.

World oil demand would grow slightly down by 1.4 percent this year and 2.2 percent next year, after growth of 3.8 percent in 2004 with a demand of 82.2 million barrels per day, the IEA said.

"There is evidence that power sector imbalances are being resolved faster than expected, and thus the demand for fuel oil in power should continue its decline," the agency said.

"Diesel use in power generation will also decline but at this point the 2006 projection for total diesel demand is largely unchanged as the Chinese economy continues to surge ahead," it added.

The agency also said that world oil supply had increased by 1.3 million barrels per day in November, compared to the figure in October, to 85.0 million barrels per day.

The Organization of Petroleum Exporting Countries (OPEC)' supplies amounted to 29.6 million barrels per day in November, an increase of 120,000 barrels a day from the October figure, said IEA.

OPEC's spare capacity averaged 2.2 million barrels per day, the IEA said, noting "spare capacity remains the key issue."

It hoped to see from 2006 to 2010 a "continued rebound in OPEC crude capacity after limited 2001-2004 additions" and revised upwards its estimate for demand for OPEC oil in 2006 to 28.5 million barrels per day from 28.4 million barrels per day this year.

Source: Xinhua