Based in Paris, the agency noted that under such conditions OPEC could come under pressure next year to boost supply. Worldwide demand in 2011 should hit 88.8 million barrels a day, 260,000 daily barrels more than previously expected, the agency said. The IEA also raised its estimate of 2010 consumption to 87.4 million barrels a day, up 130,000 daily barrels from its previous projection.

"Pre-meeting statements by OPEC ministers suggest the group is planning on a quick agreement to roll over existing output targets, against a backdrop of much stronger-than-expected global oil demand growth, however, OPEC may come under pressure to increase supplies to the market in the new year if prices continue their relentless rise," the report said.

Initial data from China suggests that demand was up by 12.6 per cent in October compared with a year earlier, the IEA said.

"The strength of China's oil demand is consistent with other indicators suggesting that the economy is in danger of overheating," the report said.

"Not only does GDP growth continue to hover around the 10 per cent mark, but inflation is also creeping up."        Add Comments>>