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Friday, 05 December, 2008, 17:10 GMT | more >>

IEA cuts demand forecast



By Upstream staff 

The International Energy Agency (IEA) has lowered its forecast for world oil demand in 2006 for a fourth straight month.

The agency, which advises 26 consuming nations, estimated 2006 demand at 85.01 million barrels per day, down 140,000 bpd from its previous monthly report.

Consumption will grow 1.5% this year and 2% next year. World demand in the fourth quarter, when consumption peaks because of winter heating, was lowered by 400,000 bpd to 85.1 million bpd, the Paris-based agency said.

"Price increases and disruptions associated with hurricanes Katrina and Rita had a substantial impact, but at the same time temperatures were very warm'', cutting US demand in September and October compared with a year earlier, the IEA said.

"It is important to emphasize that the widely reported drop-off in demand in the weeks following the hurricanes is likely overstated,'' the report said.

The IEA gave its first estimate of 2006 world demand in July. It has lowered its estimate for absolute demand in each of the three following monthly reports, while keeping the annual rate of demand growth unchanged, at 2.1%. The annual rate dropped to 2% in today's Monthly Oil Market Report.

US Energy Department officials, who supply the IEA with US supply and demand data, have "pointed to difficulties in recording product trade'' in the aftermath of the hurricanes and may be undercounting imports and overstating exports, the IEA said.

"Analysts have been searching for anecdotal indications, including road-toll receipts, to confirm the reported slowdown in oil use,'' the report said. "But, so far, there is little evidence that provides a conclusive or country-wide answer.''

The IEA coordinated an international release of emergency government stockpiles after Katrina, offering as much 60 million barrels of crude oil and products.

The agency calculated Opec will need to pump 29.6 million bpd this quarter to balance world supply and demand. That estimate was lowered 300,000 bpd from its previous monthly report because of the lower assumption for world demand.

Demand in China, the world's second-biggest oil consuming nation, will rise 6.5% next year, after gaining 3.3% this year. The IEA has repeatedly revised down its estimate of 2005 Chinese demand growth from a March estimate of 7.9%.


Thursday, 10 November, 2005, 10:35 GMT  | last updated: Thursday, 10 November, 2005, 10:35 GMT

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