IEA report raises oil demand but warns of Iran risk

Oil prices fell on Friday, continuing the pattern for the most of the week, after disappointing growth data out of energy-hungry China and amid eurozone debt strains, analysts said.There was some price support though from the International Energy Agency's latest monthly report, which raised slightly its outlook for growth of oil demand this year and warned that risks of a shock from Iran persisted.

Soaring U.S. oil production should be enough to allow consumers withstand most potential supply shocks, the International Energy Agency (IEA) said on Wednesday, as it cut estimates for global oil demand. “The oil-producing world today is in the midst of a onceinageneration transition of farreaching consequences,” the IEA, which coordinates the energy policies of major consuming nations, said in its monthly oil market report.

PAUL MURPHY posts an interesting chart from Capital Economics, showing a divergence between the prices of equities and commodities:

Canadian Natural Resources Ltd. and other major Canadian oil sands stocks tumbled as crude prices collapsed on forecasts of lower demand. Canadian Natural Resources shed 4.25% of its value around11.24am EST to stand at $31.11 on Friday. Other major oil sands developers Suncor Energy Inc. (down 3.17%), Cenovus Energy inc. (-2.52%) and Husky Energy Inc. (-2.65%) underlined sector-wide weakness.

LONDON, June 12 (Reuters) - The world is heading for a glut of refined products as new Asian and Middle East refineries increase oil processing in a move likely to force less advanced competitors in developed countries to close, the West's energy agency said on Wednesday.

West Texas Intermediate climbed in New York to the highest level in more than a week as OPEC raised its demand forecast and the Group of Seven pledged to avoid devaluing their currencies.

Coal will nearly overtake oil as the dominant energy source by 2017, and only a drop in world gas prices could curb the use of the dirtier fossil fuel in the absence of high carbon prices, the International Energy Agency said. The IEA, the energy agency for developed countries, said earlier this year that without a major shift away from coal, average global temperatures could rise by 6 degrees Celsius by 2050, leading to devastating climate change.

The International Energy Agency said on Wednesday it was cutting its oil demand estimates again as the global economic outlook darkens, with significant downside risks.The IEA reduced its global economic growth estimates for 2011 to 3.8 percent from the 3.9 percent given in its September monthly report, with 2012 down to 3.9 percent from 4.2 percent.The IEA, which advises the developed countries on energy policy and developments, said even these growth forecasts, which have slipped steadily, came with "significant downside risks."