IEA forecasts lower prices fuelling higher oil consumption

Lower prices and strengthening economic activity around the world will continue boosting oil consumption in 2015, the International Energy Agency (IEA) said Wednesday in its monthly report.

The IEA forecast global demand for oil rising to 1.6 million barrels per day (mb/d) in 2015, representing "the fastest pace in five years, as economic growth solidifies and consumers respond to lower oil prices."

The new estimate for 2015 revised the IEA's previous report by 260,000 barrels per day, and noted that "persistent macro-economic strength supports above-trend growth of 1.4 mb/d in 2016."

Oil prices have declined amid a global supply glut sustained in large part by the refusal of the Organization of the Petroleum Exporting Countries (OPEC) to cut output levels despite the surplus.

On Tuesday OPEC said production in July rose by 100,700 barrels per day from the previous month to 31.5 mb/d -- news that sent sweet light crude prices in New York to their lowest level since March.

On Wednesday, US data released showed US crude reserves had dropped in the week ending August 7 by 1.7 million barrels -- a significantly more modest decline than the two million figure analysts polled by Bloomberg had expected.