World oil demand to rise 1.8-mil

World oil demand to rise 1.8-mil b/d to 83.2-mil b/d in 2005: IEA

London (Platts)--13Jul2004


The International Energy Agency Tuesday raised its forecast for world oil
demand in 2004 to 81.41-mil b/d, up 330,000 b/d from its previous
expectations. The Paris-based agency also published its estimates of oil
market fundamentals for 2005 for the first time, predicting that global oil
demand next year would average 83.23-mil b/d, giving an annual increase of
1.82-mil b/d or 2.2%. The bulk of next year's growth in oil demand is expected
to come from non-OECD countries, with China again registering strong growth.
Chinese oil demand is expected to grow to 6.8-mil b/d next year, up 8.1% from
the current estimate for this year of 6.29-mil b/d. The expected 1.8% growth
in overall global oil demand next year would mark a slowdown from the record
3.2%--or 2.5-mil b/d--seen in 2004, but would be on a par with 2003, the IEA
said. The 2005 estimates assume normal weather, a moderate slowdown in world
economic growth, an easing of crude and product prices and a "modest
reduction" in Chinese oil consumption growth, the IEA said.

The IEA's forecasts for 2005 are based on global economic growth of around 4%,
down slightly from the assumption of 5% underpinning this year's estimates.
"Of particular concern is the sustainability of Chinese economic expansion,"
the IEA said in its latest monthly oil market report. The agency noted efforts
by the Chinese government to prevent its economy overheating, and said it
assumed China's economy would continue to grow next year, but at a "somewhat
slower pace than in 2004." Large petrochemical projects due to start up next
year are likely to boost Chinese naphtha demand, with growth in the number of
cars and amount of air travel leading to higher demand for road fuels and jet,
the IEA said. Oil demand is also expected to grow in oil exporting countries
in the Middle East and North Africa on the back of revenue windfalls from
higher prices, subsidized domestic prices and sharp population growth. US
economic growth is expected to slow down next year, the IEA said.

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