  |
Global oil demand to grow 1.8 percent next year: IEA
AFP
PARIS
Petroleumworld.com 07 12 06Global demand for oil will grow by 1.8 percent in 2007 and increase by an average of 2.0 percent annually during the five years to the end of 2011, the International Energy Agency forecast on Wednesday.
The IEA said that the current high prices of crude oil were constraining demand, but that economic expansion in Asia and rising consumption in the Middle East would outweigh this effect during the period to 2011.
Overall and in the medium term, increases in supplies of oil, mainly from OPEC countries, would outstrip increases in demand every year until 2010.
This would would add spare capacity to the global production system, the IEA said.
Oil traders have been concerned about a lack of spare capacity, or a so-called reserve capacity cushion, in the global system. In the last two years this cushion has been compressed and this has been one of the key drivers of rising prices.
The assessments were published in two reports by the IEA, one being the regular monthly assessment of the oil market and the other a medium-term outlook.
IEA executive director, Claude Mandil, said in a foreword to the medium-term report: "We believe this projected build in spare capacity to be a positive development that should bring greater stability to the oil market."
Spare capacity, the amount of oil that could be supplied above actual demand, is set to reach 4.0-6.0 million barrels per day in 2011 from the current "razor-thin levels".
"Much of this increase comes from recently announced OPEC investments to expand crude and natural gas liquids," Mandil underlined, adding that supplies of refined products were also projected to increase.
On Wednesday, prices were about 74 dollars per barrel, compared with about 40 dollars per barrel at the start of 2005 and just 20 dollars per barrel at the beginning of 2002.
The IEA was cautious about giving projections for prices in 2007, saying that geopolitical factors, the hurricane season and worries about US stocks of gasoline might over-ride considerations of supply and demand.
Although increases in supply relative to demand "should in theory help to ease some price pressures, geopolitical issues will not go away", the IEA said in its monthly oil market report.
"It is difficult to see market nerves being calmed until the summer driving season is out of the way, the hurricane season is over and the anticipated surge in second-half 2006 non-OPEC supplies materialises."
In figures, the IEA forecast that global oil demand would grow by 1.2 percent in 2006 to 84.8 million barrels per day and by 1.8 percent in 2007 to 86.4 million barrels per day.
On average over the five year period from 2007-2011, demand is set to increase by 2.0 percent annually to reach 93.7 million barrels per day in 2011.
In a sign of the shifting of power in the world economy, the IEA also forecast that oil demand from Asia would exceed that of North America by 2011.
AFP 12 0849 GMT 07 06
Copyright ©AFP. All Rights Reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels