World Oil Use to Rise the Most Since 1980, IEA Says
World oil demand this year will rise the most since 1980 as economic growth leads to higher-than-expected use in Brazil, India, China and the U.S., the International Energy Agency said.
Daily use of gasoline, diesel and other fuels will rise by 2.3 million barrels, 360,000 more than forecast last month, to 81.1 million a day, the Paris-based adviser to 26 industrialized countries said in a monthly report. The IEA's growth forecast has more than doubled from 1.06 million barrels in October.
``Everyone's been underestimating oil demand,'' said Julian Lee, an analyst at the Centre for Global Energy Studies, a London- based consultant founded by former Saudi Arabian Oil Minister Sheikh Zaki Yamani. ``A lot of it is driven by China and other developing countries, but it's the U.S. as well.''
Crude oil in New York has gained 18 percent this year because of growing demand, as refining bottlenecks limit gasoline supplies and concern grew that Middle East oil supplies will be disrupted. The Organization of Petroleum Exporting Countries decided last week to boost output, a move the IEA said should lower fuel prices by allowing inventories to rise.
Crude oil in New York, which reached a record $42.45 a barrel last week, was up 81 cents, or 2.3 percent, at $38.40 on the New York Mercantile Exchange at 12:42 p.m. In London, Brent crude rose 50 cents to $35.79 a barrel.
China, Brazil, India
Higher prices haven't curbed demand, which will exceed earlier forecasts in every quarter this year, the IEA said. This quarter, demand will average 79.7 million barrels a day, 1.1 million barrels a day higher than forecast last month.
U.S. fuel demand will average 20.58 million barrels a day this year, 200,000 barrels a day more than expected last month, the IEA said. A strengthening economy has spurred shipping and travel, boosting use of gasoline and diesel.
In China, the second-largest oil consumer after the U.S., demand reached a record 6.53 million barrels a day in April and will rise by 14 percent this year to 6.28 million a day, the IEA said. Indian demand gained by 11.3 percent in March to a record 2.57 million barrels a day.
``Chinese demand continues to drive global growth,'' the report said. ``Although Chinese consumption growth continues to steam ahead, the latest reported year-on-year gain does not appear to be sustainable in the short term.''
This year's annual growth in oil demand is the most since 1980, the IEA said. A month ago, the agency forecast 2004's increase in demand would be the biggest since 1988.
Oil Production Rising
The IEA has led calls from consumers for more OPEC oil to quell the rally in prices because of concern higher energy costs will damage economic growth. The agency expects OPEC to deliver on its promise of extra supply, leading to rising inventories.
``We welcome the OPEC pledge,'' Klaus Rehaag, editor of the IEA report, said in a telephone interview from Paris. ``The advantage of having stocks build is you have a cushion, the market is better able to cope.''
Attacks on pipelines in Iraq and against foreign workers that help run Saudi Arabia's oil industry have helped boost oil prices this year. U.S. gasoline prices surged to record levels last month on concern supplies of the motor fuel were insufficient to meet peak demand in summer.
OPEC, producer of more than a third of the world's oil, decided in Beirut on June 3 to raise its official output limit by 2 million barrels a day to 25.5 million daily on July 1, and by a further 500,000 barrels a day in August. The group is already pumping more than that, according to outside estimates.
Supply from the 10 OPEC nations with quotas, all except Iraq, reached 26.1 million barrels a day in May and might reach 27 million a day in June if Saudi Arabia, OPEC's top producer, meets a pledge to supply 9.1 million barrels a day, the IEA said.
Oil inventories are rising at a ``modest'' rate, the IEA said. Stocks held in the 30 nations belonging to the Organization for Economic Cooperation and Development in April were 29 million barrels higher than a year ago at 2.47 billion barrels.
``Additional OPEC oil is expected across the summer months,'' said Adam Sieminski, Deutsche Bank AG's global oil strategist in London, in a report. ``Stocks do not look nearly as tight as earlier this year.''
OPEC's higher production lifted world oil output in May by 460,000 barrels a day to 82 million a day. Supply from non-OPEC producers this year will rise by 1.17 million barrels a day to 50.1 million, the IEA said, unchanged from last month's forecast.
Because of rising demand, the IEA raised this year's estimate of the need for oil from OPEC, also known as the call on OPEC, by 500,000 barrels a day to 26.9 million barrels a day.
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