Building a world of
resilient communities.

MAIN LIST

 

High oil prices appear to be curbing demand

High prices appear to be stemming global oil demand, according to the west's energy watchdog, which on Tuesday pointed to signs of slower demand in the US, China and other Asian countries.

Recent moves by some Asian countries to cut fuel subsidies had curbed demand, the International Energy Agency said in its April monthly report. It also cited anecdotal evidence that US motorists were switching from fuel-thirsty sports utility vehicles to smaller cars as a factor.

“From the demand side, it would appear that the risks are, for the first time in two years, edging towards the downside,” the agency said.

The high oil price and its effect on world economic growth will be high on the agenda at the Group of Seven leading industrialised countries meeting in Washington on Friday before the International Monetary Fund and World Bank spring meetings at the weekend.

The IMF warned earlier this month of the risk posed to the global economy by rising oil prices.

Jean-Claude Juncker, Luxembourg's prime minister, meanwhile, warned at yesterday's meeting of European finance ministers that rising crude prices were “beginning to weigh rather heavily” on economic growth potential, particularly in the eurozone.

The Paris-based IEA on Tuesday noted increasing reports of moderating growth in China, which last year accounted for about a third of the total global rise in demand for crude. The agency accordingly revised lower its outlook for global demand growth, by 50,000 barrels a day this year to an average of 84.3m b/d in 2005. But it said this would not be enough significantly to soften high prices due to the limited global spare capacity for oil production and refining.

The agency's report nevertheless helped cool the market on Tuesday, with benchmark US crude oil futures sliding more than $1 to $52.70 a barrel. However, the IEA's forecast of slowing demand was not endorsed by the Organisation of the Petroleum Exporting Countries, which releases its monthly oil market report on Friday.

“International Energy Agency optimism that high oil prices are curbing demand are not shared by Opec,” said one Opec official, who added that Chinese demand was strong in March, and looked to be continuing this trend in April.

Saudi Arabia, Opec's largest producer, underlined its concern about sustained global oil demand by asking contractors to bring on new production capacity at its Haradh field four months ahead of the original schedule for the 2006 first quarter.

The IEA noted that many developing countries in Asia recently raised government controlled prices.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.


Asia depends on Middle East for 66 % of its oil imports

Of Asia’s total incremental oil imports since 2001, 4.5 mb/d (47%) …

Rural Colorado Leads the Charge for Energy Freedom

Last week the Western Slope Colorado witnessed a huge victory for energy …

“We are in danger of winning. But….”  

First in-depth radio interview on The Winning of the Carbon War, on Radio …

Renewable Energy Redoubles its Global Reach

A significant threshold has been crossed by renewable energy as analysts …

Peak Oil Review - June 29

A weekly review in including Oil and the Global Economy, The Middle East …

Energy Crunch - six months to go

With fewer than six months to go until the UN climate summit in Paris, …

BP Data Suggests We Are Reaching Peak Energy Demand

The real situation is that we right now seem to be reaching peak energy …