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Tuesday, 02 December, 2008, 22:10 GMT | more >>

China fuels IEA forecast


Agency raises prediction on back of economic growth



By Upstream staff 

Robust world economic expansion, led by China, is fuelling faster-than-expected oil demand growth, the International Energy Agency said today.

In its monthly Oil Market Report, the Paris-based IEA raised its forecast for incremental world petroleum demand for the third time in four months.

The projection for growth in 2003 was lifted by 160,000 barrels per day to 1.44 million bpd on the 78.4 million bpd world oil market. In the summer the IEA was estimating extra demand this year of just one million barrels daily reflecting a more cautious outlook for the world economy.

The agency also raised its forecast for growth in 2004 by 90,000 bpd to 1.16 million bpd.

"Oil demand growth continues to be driven by the rapid expansion in global economic activity," an IEA spokesman told Reuters.

The IEA said it had revised higher its estimate for demand growth in China by 130,000 bpd to reflect higher substitution from other fuels, particularly coal, into oil.

"Chinese apparent oil demand continues to advance at breakneck pace," it said.

The IEA is forecasting Chinese oil demand will rise by 490,000 bpd to 5.43 million this year and by a further 320,000 bpd next year.

Meanwhile, the strife surrounding Russian oil giant Yukos and its prospective merger partner Sibneft is a potential threat to 200,000 barrels per day of production growth next year, the agency said.

"Prospects for growth in 2004 will be critically dependent on how the current legal and political procedures surrounding Russia's large producer Yukos play out," it reported.

"Any impediment to their continued expansion would have a material impact on total Russian supply growth," it said, adding that for the moment it continued to assume short-term operations would be unaffected.

The IEA estimated that expansion projects should add 600,000-700,000 bpd of Russian export capacity next year, with production growth pegged at the lower end of that scale or about 7% year on year - down from 11% growth in 2003.

Russian crude oil production in October reached 8.53 million bpd in October and an estimated 8.56 million bpd in November, the IEA said.


Wednesday, 10 December, 2003, 12:23 GMT  | last updated: Friday, 29 April, 2005, 14:56 GMT

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