Global oil demand forecast rises...again

Global Oil Demand

The International Energy Agency (IEA) has raised global oil demand figures yet again based on larger-than-expected consumption growth in Asian markets.

For the second month running the IEA have been caught out by the massive jump in Asia's oil growth, the Paris-based organisation increased its estimate for world demand in 2010 by 70,000 barrels per day (bpd) to 86.6 million bpd. That would mean a gain of 1.6 million barrels a day, or 1.8 percent, from 2009 levels, it said. Economies outside the Organization for Economic Cooperation and Development (OECD) "continue to lead the recovery in consumption", the IEA said.

In its monthly oil market report the IEA said: "Global oil demand resumed growth on a yearly basis in the fourth quarter of 2009 after five consecutive quarters of decline.

"This year's global oil demand growth will be driven entirely by non-OECD countries, with non-OECD Asia alone representing over half of total growth."

China's "astonishing" growth

Unsurprisingly China are spear-heading the region's demand growth, with the IEA describing the country's thirst for oil as "astonishing". China's demand jumped a staggering 28 percent in January compared to the same month a year earlier.

Oil prices are currently at their highest point for two months, with US light, sweet crude above $82 a barrel and Brent crude more than $80 a barrel.

The IEA said the high price level was due to "heightening of geopolitical tensions affecting some producing countries", but that this had been balanced by "ample physical oil supplies".

The IEA has been among the more bullish forecasters in the oil market. Other analysts think issues like high US unemployment, weak lending and economic problems in Europe will impact on consumer activity, all of which will retard global oil demand growth to just around half the rate the IEA is currently projecting.

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Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

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