UPDATE 3-U.S. sees stronger 2012 world oil demand growth

Tue Jan 11, 2011 9:51pm GMT

 * Stronger oil demand to push crude prices to $99
 * More OPEC supply needed or oil price will go higher
 * Big drop seen in U.S. Gulf of Mexico oil production
  (Adds oil demand growth in developing countries, para 6
 By Tom Doggett
 WASHINGTON, Jan 11 (Reuters) - Global oil demand growth
will accelerate next year, while non-OPEC production will
remain flat, driving oil prices to an average $99 a barrel, the
U.S. government said on Tuesday in its first energy forecast
for 2012.
 The Department of Energy also said U.S. Gulf of Mexico oil
production would shrink by 180,000 barrels per day (bpd) next
year after a 220,000-bpd loss this year, illustrating the
challenge of delivering new supply on the same day that a White
House commission recommended dramatically stepping up offshore
drilling regulations. [ID:nN11123375]
 The new monthly forecast from the department's Energy
Information Administration made marginal changes in the oil
demand outlook for 2011, paring global growth by just 20,000
bpd to 1.45 million bpd for a 1.7 percent annual rise.
 Oil demand is set to grow 1.9 percent, or 1.63 million bpd,
in 2012, taking consumption to a new record of 89.65 million
bpd after breaking this year's expected all-time demand high of
88.02 million bpd.
 Global oil demand growth in each of the next two years will
be above the most recent 10-year average of about 1 million
bpd, or a 1.2 percent annual increase. "We're stronger than
average growth," said EIA senior analyst Doug MacIntyre.
 Developing countries are expected to account for all of the
world's oil demand growth over the next two years, with China,
the Middle East and Brazil representing the biggest oil
consumers.
 But the agency cut non-OPEC oil production growth this year
by nearly 40 percent to just a 170,000-bpd increase, and said
output would climb by a meager 20,000 bpd in 2012, requiring an
increase in supply from the Organization of the Petroleum
Exporting Countries (OPEC) to prevent another price spike.
 "Consequently, EIA expects the market will rely on both
inventories and significant increases in production of crude
oil and non-crude liquids in OPEC member countries to meet
world demand growth," the agency said.
 The EIA, which had issued the most accurate forecast for
2010 prices in a Reuters poll conducted a year ago, also
forecast oil prices to average $93 a barrel this year and rise
to an average $99 in by the fourth quarter of 2012. Those are
both higher than the current Reuters analyst poll that shows
forecasts for $86.36 and $92.50, respectively POLL70.
 "Should OPEC not increase production as global consumption
recovers, oil prices could be significantly higher," the EIA
warned.
 Consumers will feel the pain of higher oil prices at the
gasoline pump. The agency U.S. gasoline prices could exceed
$3.50 a gallon this summer and there's a small chance they
could jump past $4 during August and September.
(Reporting by Tom Doggett, additional reporting by Jonathan
Leff in New York; Editing by Lisa Shumaker and Sofina
Mirza-Reid)