In simple terms, you might think that the focus should surely be on the outright demand figure, regardless of whether the forecast is rising.

This month, the IEA raised its estimate of world oil demand in 2011 to 88.51 million b/d. That was 350,000 b/d more than it had previously been predicting, a pretty sizeable month-on-month change.

But there can be a problem with data like this. In many cases, the change to a forecast is not based on any reappraisal of that period, but stems instead from changes to historical estimates.

In other words, if the IEA decides in November 2010 to make a big upward revision to its estimate of how much kerosene Indonesia has been using since 2005, or how much diesel gets used in Chile (neither of which actually happened this month, I should add), this will have a knock-on effect on world oil demand estimates right through to the present day, and on the forecasts for next year.

If you are trying to assess how buoyant the oil market is, and what the demand outlook is like, you may well decide that changes to baseline demand in 2005 are pretty irrelevant.

In which case you might look at year-on-year growth instead, which should strip out the 'noise' of historical revisions and leave you with a truer picture of the underlying trend.

This gives you a different problem though. This month, for example, the IEA is projecting that oil demand in 2011 will be 1.19 million b/d more than in 2010. While that sounds like decent growth, the figure is actually 20,000 b/d less than the same projection a month earlier.

It is fair to say that even seasoned oil market observers might get confused if they read headlines along the lines of "IEA raises 2011 oil demand, cuts 2011 demand growth."

So can you just ignore the simple, outright number and focus on the year-on-year growth? You could if you wanted to, but the problem is that the outright demand estimate underpins much of the analysis undertaken by the IEA and others. It also has a direct impact on the 'call on OPEC,'  a useful indicator which is the IEA's best estimate of the amount of oil OPEC needs to pump in any given period to balance supply and demand.

So although they may be messy and, superficially at least, contradictory, it's worth looking at all the different demand data before trying to work out what it all means. Focusing on just part of the numbers may make them easier to digest, but it could also mean you're not getting the whole picture.

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