PREVIEW - Greek crisis may push EIA to cut global oil demand

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The Greek financial crisis could prompt the U.S. Energy Information Agency to pare its estimate for global oil demand in its latest forecast on Tuesday, on concerns the economic fallout could lead to less fuel demand in Europe.Last month, the EIA cut its estimate for global oil growth for this year by 10,000 barrels per day as weaker European oil demand was expected to overshadow higher Asian, namely Chinese, demand.In its April forecast, global oil consumption for this year was projected to rise by 1.46 million bpd to 85.5 million bpd, down from an increase of 1.47 million bpd forecast in the previous month.The May demand number could be revised down again thanks to the economic fallout from the Greek debt crisis, cutting into Europe's oil consumption, according to Phil Flynn, energy analyst at PFGBest Research in Chicago."I definitely think the market is assuming the situation will hurt demand and lower demand expectations," Flynn said."We were living in this kind of Nirvana that everything is getting better and will continue to grow, and this Europe problem can be swept under the rug. But obviously, it can't be," Flynn said.Oil prices fell $11 last week on concerns over Greece, falling from $86 to $75 a barrel, but on Monday, a $1 trillion global emergency package to stabilize the euro helped to boost crude futures at the New York Mercantile Exchange $1.69 to $76.80.Tim Evans, energy analyst at Citi Futures Perspective in New York, said "there may be some room" for the EIA to revise down its demand outlook, especially with Europe's economic problems."Europe could be considered more of a question market than it was a month ago," he said. However, Evans said the rescue package E.U. leaders agreed to over the weekend could offset concerns about weaker oil demand.Separately, an EIA spokesman said the agency's new forecast will mention the growing oil spill in the Gulf of Mexico, but he declined to speculate on whether the environmental disaster would significantly affect the EIA's supply and demand projections.One EIA analyst pointed out that so far, the oil spill has had little impact on petroleum prices or supplies. BP's exploratory well was not yet in commercial production so it was not providing steady crude supplies to the market.PFGBest's Flynn agreed that the oil spill would not have much short-term impact in the EIA's forecast, unless the agency fears it will eventually interfere with shipping channels.That would slow tankers bringing oil imports to the United States, disrupting supplies going to refineries and likely pushing up oil prices."The oil spill remains more of a potential disruption to either the rate of crude oil imports or Gulf Coast refinery operations than an actual one at this point," Evans said.Evans from Citi said weak oil prices suggest that U.S. crude oil imports will remain high and "largely unaffected by the spill."The EIA forecast will come out only hours after the Organization of the Petroleum Exporting Countries releases its monthly supply and demand projections on Tuesday.The International Energy Agency will then issue its monthly forecast on May 12.(Reporting by Tom Doggett; Editing by Marguerita Choy)

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