Further, the IEA also said the Organization for Economic Cooperation and Development members oil stockpiles in October 2007 fell to 52.6 days, or just below the 5-year average.
Energy prices cast aside the news Friday morning, at least for the time-being: oil fell 90 cents to $91.36 per barrel, heating oil fell 1 cent to $2.62 per gallon and unleaded gasoline dropped 4 cents to $2.37 per gallon.
"It's a slightly bearish report, but one that shouldn't move the markets too much," independent energy trader Jim Dietz told BloggingStocks Friday. "A 210,000 increase on a monthly revision isn't too bad, and the market expects these rough numbers to move around, so it's pretty much factored into the price." Dietz added that he remains flat and has no positions in oil, heating oil, gasoline or natural gas at this time.
Strong growth in emerging markets and persistent increases in gasoline consumption in the United States has placed an upward pressure on oil and gasoline prices for more than four years. Further, the energy headwind has been a factor in rising U.S. inflation and is also expected to slow U.S. economic growth in Q4 2007, and at least in the first half of 2008, many economists agree.
The IEA also noted that the amount of oil OPEC supplies to global oil markets appears to be increasing. The IEA estimated that OPEC, which supplies about 40% of the world's oil, pumped 31.1 million barrels per day in November 2007, and the IEA expects that total to increase in December 2007.
Dietz said if oil prices remain above $85 per barrel and U.S. gasoline prices remain above $3 per gallon in 2008, he expects demand destruction, or a reduction in energy use, to begin to take place in the United States, particularly with regard to gasoline.
"The high prices won't affect heating oil too much, as people have to heat their homes, but those anticipated declines in gasoline usage should start to occur in 2008," Dietz said. "Reduced consumption didn't occur in 2007, but it's hard to envision a market where gasoline prices remain this high without some reduction on the part of consumers."