The era of sluggish global oil demand appears to be over. The International Energy Agency Friday increased its 2010 global oil demand forecast by 350,000 barrels per day (bpd) to about 86.1 million bpd, on the prospect of stronger GDP growth in the Americas and Asia.

This means the IEA now expects global oil demand to increase by about 1.42 million bpd in 2010. The IEA said global oil demand currently averages about 84.6 million bpd; meanwhile, the organization said global oil supply totaled 84.9 million barrels per day in September, or 310,000 bpd higher than in September 2008.

However, oil was little changed early Friday on the news, rising just 16 cents to $71.85 per barrel.

During the past year, a non-OPEC 1.6 million bpd production increase relative to last year's hurricane-hit base has been offset by an equal amount of OPEC production cuts, the IEA said. Further, OPEC has cut production by about 4.2 million bpd during the past 24 months, citing the U.S. and global recessions.

The prospect of rising oil demand amid the global economic recoveries is one factor that's kept the price of oil unusually high, despite the recession. The price of oil has risen about 100 percent this year, to about $71 per barrel, after hitting a post-leverage-bubble low of around $36 per barrel in December 2008.

The $71 price has also flown in the face of oil inventories, which are brimming in many regions of the world. The seeming contradiction is also partially explained by the weaker dollar, economists generally agree. Since oil is priced in dollars, the price of oil generally rises as the dollar falls, as oil producers and investors bid-up the price of oil, to protect the purchasing power of their dollar-denominated product.

Oil hit a record high of $147.27 per barrel in the summer of 2008, amid the leveraging boom. Incredibly, less than six months later, oil plunged below $40 per barrel, as it became clear that the global economy had entered a recession -- its first since the end of World War II.

For investors, the increased IEA oil demand forecast is likely to be bullish for integrated oil companies, others who service the oil sector, and more-fuel-efficient vehicle manufacturers.

For U.S. motorists, the prospect of increased global oil demand -- and the likely higher oil price it implies -- means there won't be any relief at the pump from prices that currently average about $2.47 per gallon for unleaded regular gasoline, according to data compiled by gasbuddy.com.

Oil Analysis: The higher global oil demand and likely higher oil price is bad news for the U.S. economy: each $1 per barrel increase in oil decreases U.S. GDP by $100 billion per year and every 1 cent rise in gasoline decreases U.S. consumer disposable income by $600 million per year. In a nutshell, higher gasoline, diesel, and heating oil prices act as a "de-facto tax" on U.S. consumers and businesses -- one compelling reason for the nation to increase its energy efficiency and reduce its oil consumption throughout the economy.

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