London (Platts)--14Mar2014/911 am EDT/1311 GMT

The International Energy Agency Friday revised upward its estimate of world oil demand in 2014 on an improving economic picture, but said burgeoning supply from both OPEC and non-OPEC countries meant pressure on oil markets was likely to ease.

Oil prices have remained largely calm despite the bullish demand outlook and the crisis in Ukraine, thanks in part to buoyant production from the likes of Iraq, as well as the continued upsurge in output from North America.

"While international tensions may be on the rise, pressure on oil markets...seems set to ease," the agency said in its latest monthly oil market.

The IEA now expects demand to average 92.68 million b/d this year, 80,000 b/d higher than previously expected and up 1.35 million b/d from 2013. The latest revision marked the seventh consecutive upgrade the agency has made to its 2014 demand forecast. When it issued its first estimates for 2014 in July 2013, the IEA predicted that demand would amount to 91.98 million b/d, and that growth in demand this year would be 1.21 million b/d.

Growth momentum is likely to build over the course of this year as economic conditions improve, although the political crisis in Ukraine has "increased downside risk to the forecast," the IEA said.

The growth in oil demand this year is expected to come exclusively from outside the developed economies of the OECD, notably from China but with consumption also rising in countries like India, Russia, Brazil and Saudi Arabia.

On the supply side, the IEA is expecting non-OPEC oil production to rise to 56.4 million b/d this year, up 1.7 million b/d from last year's 54.7 million b/d. RELENTLESS GROWTH IN US, CANADA

The increase in non-OPEC supply is being fueled by what the agency described as "relentless growth in US and Canadian supplies," with smaller increases also expected in Russia, China and Brazil.

The higher demand estimates had a knock-on impact on the call on OPEC, which represents the amount of crude the oil exporting group would have to pump in order to balance supply and demand.

The IEA now sees the call on OPEC at an average of 29.7 million b/d in 2014, 100,000 b/d more than previously estimated but nonetheless down noticeably from the corresponding figure for 2013 of 30.3 million b/d, as surging non-OPEC supply continues to outpace growth in demand.

The average call on OPEC crude for 2014 is also substantially below the group's actual production, which the IEA said jumped by 500,000 b/d in February to reach 30.49 million b/d, breaking the 30 million b/d mark for the first time in five months. IRAQI OUTPUT LEAPS

The large month-on-month increase stemmed from a surge in production from Iraq, whose output rose to 3.62 million b/d from 3.09 million b/d in January, the IEA said in its latest monthly oil market report.

This increase reflected upgraded infrastructure at southern Iraq oil projects and debottlenecking at its export facilities in the Persian Gulf and helped push the country's output to its highest level since 1979.

Basrah Light exports from the Gulf leaped by 470,000 b/d to 2.51 million b/d last month as Iraq was able to load tankers at two offshore single point moorings simultaneously for the first time.

As well as the additional Iraqi volumes there were also smaller increases in February production from fellow OPEC members Saudi Arabia, Nigeria, Angola, Algeria, the IEA said, with Saudi production rising by 90,000 b/d to 9.85 million b/d.

The higher OPEC production pushed total global oil supply to 92.87 million b/d, up 660,000 b/d from January, with the non-OPEC share of the total rising by around 100,000 b/d.

Non-OPEC growth continued to come from North America, although the rate of growth there was lower than the recent average as cold weather in the US Midcontinent and Texas hampered production activity, the IEA said. LOW STOCKS

The higher supply estimates for February may help replenish stocks, which, the IEA said, were unusually low at the end of January in OECD countries.

The agency said OECD oil stocks fell by 13.2 million barrels in January to end the month at 2.551 billion barrels as the unusually cold weather in North America ate into heating fuel inventories.

The counter-seasonal fall in overall inventories left stocks some 154 million barrels below the seasonal average for this time of the year, the biggest seasonally adjusted deficit in OECD stocks since February 2003.

The agency said the drop in inventories was even more surprising given that, until 2014, the month of January had seen an increase in stocks in every year since 2008.

Preliminary data for February suggest that OECD stocks remained broadly stable last month, falling by around 100,000 barrels, as rising crude stocks were balanced by falling refined product levels, the agency said.

--Richard Swann, richard.swann@platts.com --Edited by Jonathan Dart, jonathan.dart@platts.com

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