The International Energy Agency on August, 12 raised its forecast for global oil demand this year and next, expecting increased appetite for energy in China while demand is still expected to fall in Europe and North America.

The Paris-based agency added 70,000 barrels a day to its 2010 forecast of global oil demand. The new prediction of 85.3 million barrels a day is a 1.6 percent increase over this year.

In its closely watched monthly survey, the IEA also increased its 2009 forecast by 190,000 barrels a day to 83.9 million barrels a day, but noted this is still 2.7 percent lower than 2008. The IEA said "These upward changes have barely dented the sharp demand contraction expected this year.

"The evidence of bottoming out of the global recession is patchy and global gas-oil demand - a key indicator of economic health - remains significantly subdued, "it said.

China's economy has continued to grow even as Europe and America stumbled into recession in the wake of the financial crisis, which started in 2007 as banks suffered heavy losses on securities backed by mortgages to people with shaky credit.

A rebound in oil demand next year would mark the end of two straight years of falling global oil demand.

The IEA said its forecast for demand in the member nations of the rich-world Organization for Economic Cooperation and Development is "broadly unchanged" in 2010 and "slightly" higher this year.

Its prediction for non-OECD demand is higher for both years after a "reappraisal of Chinese demand prospects."

Chinese forecasts were raised with a prediction of 2.8 percent growth this year and 4 percent next year.

Its European forecasts of a decline of 4.3 percent this year and 0.4 percent next year were unchanged. In North America, the 2009 expectation of a 5.1 percent fall was unchanged, and the 2010 prediction of a 0.9 percent rise was down slightly.

The annual peak in gasoline sales during the summer vacation period failed to materialize for the second year in a row, the agency said.

THE ASSOCIATED PRESS