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Page added on March 14, 2014
IEA Raises 2014 Oil Demand Estimate as World Economy Recovers
Oil demand will be higher in 2014 than previously estimated as global economic growth recovers, the International Energy Agency said. Pressure on supplies will ease in coming months as seasonal consumption dips.
World consumption will increase by 1.4 million barrels a day, or 1.5 percent, this year to a record 92.7 million a day, or about 95,000 a day more than forecast last month, according to the IEA, a Paris-based adviser to oil-consuming nations. While freezing U.S. weather has eroded oil inventories to their lowest level in more than a decade, fading demand for winter fuels coupled with a 35-year peak in supplies from Iraq will help replenish stockpiles, the agency said.
“Growth momentum is expected to benefit from a more robust global economic backdrop,” the IEA said in its monthly market report. Still, a seasonal lull in demand means “pressure on oil markets, ceteris paribus, seems set to ease.”
West Texas Intermediate crude futures are little changed this year, trading at about $98 a barrel today, as signs of economic recovery in the U.S., the world’s largest oil user, counter slowing growth in emerging nations. Manufacturing and jobs growth in the world’s biggest economy surpassed forecasts in February, government data showed earlier this month.
OPEC Production
The increase in global consumption will require a higher average level of crude this year from the Organization of Petroleum Exporting Countries than previously expected, according to the report.
OPEC, responsible for about 40 percent of world oil supplies, will need to provide 29.7 million barrels of crude a day in 2014, or about 100,000 a day more than anticipated in a month ago. Still, that’s about 800,000 a day less than the group’s production in February.
OPEC’s 12 members boosted output by 500,000 barrels a day to 30.49 million in February as a surge in Iraq’s exports pushed the organization’s production above its 30-million barrel ceiling for the first time in five months, according to the IEA. Iraq’s production climbed by 530,000 barrels a day to 3.62 million a day, the most since 1979, while that of Saudi Arabia, the group’s biggest member, rose 90,000 to 9.85 million.
OPEC’s own monthly report, published on March 12, estimated the group’s output at 30.1 million barrels a day in February and Iraq’s supplies at the highest since 1980.
U.S. Strengthening
While all of the expansion in demand next year will be accounted for by developing nations, the pace of growth in China and other emerging nations is slowing, the IEA said. U.S. demand “continues to show signs of strengthening,” it said. Tensions between the West and Russia over Ukraine “has increased downside risk to the forecast” for global consumption, the agency said.
Unusually cold weather in the U.S. helped caused a “staggering” drop in oil inventories among developed nations, which fell by 13.2 million barrels to 2.6 billion in January, a month when they normally accumulate, the report showed. Supplies in the Organization for Economic Cooperation and Development were 154 million barrels below their seasonal average at the end of January, the widest deficit in more than a decade.
“An improving supply outlook partly offsets these recent draws,” with supplies from outside OPEC rising at the fastest pace since the early 1990s, the IEA said. Non-OPEC production, driven by the U.S., Canada and Brazil, will climb by 1.7 million barrels a day this year to 56.4 million a day, an estimate unchanged from last month’s.
16 Comments on "IEA Raises 2014 Oil Demand Estimate as World Economy Recovers"
J-Gav on Fri, 14th Mar 2014 11:57 pm
The so-called “world economic recovery” is no more than a game of smoke and mirrors. Don’t allow yourselves to be hoodwinked by such nonsense.
dolanbaker on Sat, 15th Mar 2014 12:04 am
Do they really expect that supply will suddenly increase to match demand!
Nony on Sat, 15th Mar 2014 12:29 am
No. That’s our explanation for the high prices. Economy is too good. 😉
Makati1 on Sat, 15th Mar 2014 1:40 am
The only ‘growth’ is in the fake numbers everyone is putting out these days. The West is in recession and has been since at least 2007 or maybe 1971. The East is still growing slowly, but that too can not last much longer. They can grow because they make oil work and produce a product. Much of the West, especially the US, wastes it on their car and airline addictions. Or so it seems to me.
GregT on Sat, 15th Mar 2014 7:06 am
If the world’s economies were really recovering, we wouldn’t have heard about it in the media every day for the last 5 years.
MSN fanboy on Sat, 15th Mar 2014 8:17 am
The world economy has recovered! look at the job number morons…. I don’t know why im on this site
You all smell
Like bullshit
Bloomberg is part of the free independent media, they always tell the truth.
MSN fanboy on Sat, 15th Mar 2014 8:18 am
The economy is recovering! and you are too scared to admit it :0 sad acts
peakyeast on Sat, 15th Mar 2014 11:05 am
Yeah.. The economy is improving – for the rich and those that can live for less than others. For example here in Denmark we now have hordes of polish, lithauian and people from other low-pay countries taking the regular jobs from Danish citizens. So we have a lot of non-working danish citizens and a government that actively promotes a slave-like labour market – like in china. It gives nice plusses for the companies while at the same time inflicting a sense of helplessness and fear in the population. A win-win situation – for the few and the very poor. Byebye decent living for lower-middle class.
Davy, Hermann, MO on Sat, 15th Mar 2014 11:25 am
Makati said – The only ‘growth’ is in the fake numbers everyone is putting out these days.
Byebye decent living for lower-middle class.
I agree Makati and Peakyeast. My bend is finance and when you see the corruption, manipulation, and distortions you realize it is nothing more than a Ponzi Scheme of debt. Debt hides the reality of negative growth. Almost all the indicators have been massaged to avoid revealing this reality. The cannibalization of the lower classes in a wealth transfer policy is remarkable. It was always the case globally with the developed world and developing world but now it has had to go to a new level of the upper class against the lower class globally. Current growth is only digital. We all know the reality of digital. I like to see the photo shopped girls. The same is true of MSM and MS statistics. I don’t think oil supply will be the issues for 5 at least because the financial situation will trump the energy limit card. There is in finance a thing called fundamentals and there has always been business cycles. How can it be different now?
Makati1 on Sun, 16th Mar 2014 8:36 am
Davy, the only thing I can add at this point is that this business cycle will be down and stay there. The past is no indication of future cycles as we have run out of the necessary resources to come back. We are coming into a whole new world never experienced in history.
Arthur on Sun, 16th Mar 2014 9:49 am
Don’t know about north-America, but the economy is definitely picking up in Europe again. Nobody talks about Greece anymore or problems with the euro. Headhunters keep calling almost like in the days of the dot com craze. House prices no longer fall.
q on Sun, 16th Mar 2014 10:31 am
Arthur: Yes, propaganda is focused mainly on “evil Russia” today and we do not hear much about Greece. But there is still some Greece news every now and then, recently for example about the unemployment that has reached a record high of 28%.
Davy, Hermann, MO on Sun, 16th Mar 2014 11:55 am
Arthur said – Don’t know about north-America, but the economy is definitely picking up in Europe again. Nobody talks about Greece anymore or problems with the euro. Headhunters keep calling almost like in the days of the dot com craze. House prices no longer fall.
Arthur the real economy has not picked up in Europe. The debt and distortions are still there. The unfunded liabilities have not gone away. The resulting contagions are still there. The Ponzi scheme of debt and the debt bubble have not gone through a managed deflation. What we see is a continuation of world central banks creating liquidity by monitarization of debt and currencies. Places like China have reached their limit in their particular debt scheme. I might add what China has done with debt is so big it dwarfs all the other central banks combined. The only difference with what the US FED is doing is the FED is debasing a reserve currency which will have other massive effects. Europe is a mess and caught in a “catch 22” they need more integration and subsidies from the rich to the poor countries. Yet, no one in Europe wants to loose sovereignty or subsidize another region. Deflation is rampant in Europe and reflects stagnating and negative real growth. The poor countries with the sovereign debt issues cannot just swipe this debt under the table. Real portions of their economies have evaporated. Taxes have increased and worse lies ahead. The US and China can’t hide from this because of the integration and exposures of the global system. To top this off we have the black swan Ukraine ready to complicate things more yet again. The global world is in a spiral and all economies are locked in a death embrace. The million dollar question is when. This could continue for a while because confidence is liquidity. The rich are going to do everything to keep this going. I will say the longer it continues the worse it will become. The distortions, disregard for the rule of law, manipulations, and corruption are eating away at the real economic and social fabric. Wealth transfer is destroying the real wealth created on “main street”. Ponzi schemes and bubbles can grow very large and destructive. The problem now is the bubble is us and all of us. We are all in this together and no one will get out alive so to speak.
GregT on Sun, 16th Mar 2014 1:25 pm
MSN fanboy said:
“The world economy has recovered! look at the job number morons…. I don’t know why im on this site
You all smell
Like bullshit”
Smells like a smurf to me.
Northwest Resident on Sun, 16th Mar 2014 7:04 pm
GregT — Yep. Sock Puppetry at its “finest” — an awesome display of ignorance, stupidity and obnoxious character.
Davy, Hermann, MO on Sun, 16th Mar 2014 7:43 pm
I second that N/R and Greg!