The U.S. Energy Information Administration (EIA) projected world oil consumption would rise by 1.7 million barrels per day to 88.43 million bpd in 2011. The latest monthly report is up 300,000 bpd from its growth forecast in May, when the agency had actually cut its oil demand outlook.

Analysts had expected the EIA to cut its growth forecast further this month after a slate of poor economic figures and some evidence that persistently high oil prices was eroding fuel demand, particularly in Western markets.

The EIA said the upward revision was primarily supported by higher forecasts of electricity use in Japan, where the closure of nuclear power plants after March's earthquake has increased oil demand, plus China and the Middle East.

The new forecast puts the EIA significantly above both the Paris-based International Energy Agency and OPEC's own forecast, both of which will be revised over the next week, after the producer group's policy meeting on Wednesday.

Analysts had said a forecast for higher oil demand could help convince OPEC ministers meeting this week in Vienna to boost the group's oil production to help meet stronger global fuel consumption expected during the second half of this year.

Next year oil demand is expected to climb 1.6 million bpd to 90.02 million bpd, up 10,000 bpd from the government's previous forecast.

Developing nations will make "almost all of the growth in consumption over the next two years, with the largest increases coming from China, Brazil, and the Middle East," the EIA said.