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Worldwide oil demand continues to grow International Energy Agency ups its prediction for 2004 consumption, up 2.3 million barrels per day from ’03 Petroleum News
The International Energy Agency has revised upward its estimate of worldwide oil demand for 2004, pointing to continued strong consumption in the United States and former Soviet Union nations.
Growing demand in China also is helping to push up global oil demand, though the Paris-based agency cautioned that China’s growth in oil consumption could start to slow as the government’s efforts to cool its overheating economy begin to take effect.
The agency June 10 reported it expects global oil demand to average more than 81 million barrels a day in 2004 and as much as 82.6 million barrels in the heating-oil season of the fourth quarter.
This year’s latest estimate shows steady growth from 2002’s worldwide total consumption of about 76 million barrels per day. The revised projection pegs demand growth for 2004 at 2.3 million barrels per day over 2003, the largest single-year increase since 1980, the agency said.
In addition to heavy demand by U.S. consumers and former Soviet Union nations, the international monitoring agency said oil demand surged past expectations this spring in Brazil and India.
Increased production from the member nations of the Organization of the Petroleum Exporting Countries will help meet the growing demand, the agency said, but noted that global terrorism concerns and uncertainty over supplies have kept prices high.
“We take the commitments of these producers seriously,” the agency report said of OPEC’s pledge to boost production. OPEC already producing over quota OPEC production in May averaged 26.1 million barrels a day, almost 3 percent higher than April and about 11 percent above the cartel’s official quota. The member nations have agreed to boost their quota by 2 million barrels a day to 25.5 million barrels in July and to 26 million barrels in August, but even that would be short of their actual production in May.
The question that market watchers are asking is regardless of the quota, how much can OPEC produce above its current flow to meet demand?
Most of the OPEC boost in May came from Saudi Arabia and the United Arab Emirates, the report said, with the world looking to those two and other OPEC members to increase their flows as much as possible to help hold down prices.
The International Energy Agency report noted that while OPEC production grew in May, non-OPEC flow held level — though non-OPEC production for the full year is expected to be up about 2 percent over last year. Higher production from Russian and African fields in May offset declines elsewhere in the world.
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