|April 13, 2010|
IEA: Record-High Oil Demand in 2010
|The International Energy Agency (IEA) announced on Tuesday that it had revised its estimates for oil consumption in 2010, and now expects this year to have the highest global demand for oil ever., reported Reuters. The new estimate is 100,000 barrels per day (bpd) higher than before, with oil demand expected to average 86.6 million bpd.|
"The return of economic growth and hence oil demand growth is fuelling the increase," the IEA said in the April edition of its monthly Oil Market Report. In February the IEA forecast that oil demand in 2010 would match the previous record of 86.5 million bpd, set in 2007 before the recession. As recovery continues, the IEA predicts that oil demand from 2009 to 2010 will grow by 1.67 million bpd.
Oil demand is rising not just in the developing nations of Asia and the Middle East, the IEA said, but also in North America. Demand in Europe remains weak. Non-OPEC supplies will meet this demand, especially growing production in Canada, the UK, and Russia. The IEA raised its forecast for non-OPEC production by 220,000 bpd to reach an average of 52 million bpd.
Growing supply from outside of OPEC, combined with eroding compliance with production quotas within OPEC, could keep prices stable as demand increases. In fact, the price of crude oil continued to decline on Tuesday after the IEA's announcement. Nevertheless, the IEA echoed the concerns of other analysts and warned that rising oil prices could prevent economic growth, which in the end would harm producers as well as consumers:
Ultimately, things might turn messy for producers if $80-$100 per barrel is merely seen as the new $60-$80, stunting economic recovery while prompting resurgent non-oil and non-OPEC supply investment.
According to the IEA, the interests of consumers and producers are aligned in favor of lower oil prices.