International Energy Agency raises oil demand forecast

Highlights of the latest OMR
dated: 12 October 2004

The global oil demand forecast has been raised by 240 kb/d for 2004, to 82.4 mb/d, but trimmed by 70 kb/d for 2005, to 83.9 mb/d. The cut reflects expectations of slower economic growth and the impact of high oil prices on demand and the economy.

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http://omrpublic.iea.org/
Highlights of the latest OMR
dated: 12 October 2004

NYMEX WTI crude futures surpassed $53/bbl in early October. Disrupted output in the Gulf of Mexico, unrest in the Niger delta and strikes in Nigeria, Norway and Brazil contributed to rising prices. Distillate rich sweet crudes were in strong demand, and combined with high OPEC sour output, pressured the sweet/sour spread.

The global oil demand forecast has been raised by 240 kb/d for 2004, to 82.4 mb/d, but trimmed by 70 kb/d for 2005, to 83.9 mb/d. The cut reflects expectations of slower economic growth and the impact of high oil prices on demand and the economy.

Chinese demand growth shows signs of easing. Preliminary data suggest August growth slowed to 6%, from 12% in July and 25% in the second quarter. This reflected price effects, conservation measures and new non-oil power generation capacity.

OPEC crude supply rose 710 kb/d in September to 29.9 mb/d as Iraqi output rose 540 kb/d to 2.3 mb/d and Saudi Arabia maintained supply close to 9.5 mb/d. Nigerian production has been largely unscathed by ethnic and labour unrest. The ‘call on OPEC crude and stock change’ averages 27.9 mb/d for 2004 and 27.6 mb/d in 2005.

World oil supply rose by 640 kb/d to 84.0 mb/d in September. Non-OPEC output fell for a third month, by 100 kb/d. Hurricane Ivan shut-in 475 kb/d of US Gulf Coast output, with similar reductions expected to persist in October. Recovering US and North Sea production should help non-OPEC supply rise by 1.4 mb/d from September to December.

OECD industry total oil stocks increased 240 kb/d or about 7.5 mb in August, closing 12.3 mb above 2003. Builds in product stocks, particularly distillates, more than offset crude oil inventory draws as refiners maintained high throughputs. Days of forward demand cover remained stable from July at 52 days, one day below August last year.

© OECD/IEA. All Rights Reserved

http://omrpublic.iea.org/