[ 2013-07-11 ]

Emerging nations to drive oil demand to a high, says IEA
Emerging economies will be the main force in the
global oil market next year, driving demand to a
record high level, International Energy Agency
(IEA) data showed on Thursday.

Raising its demand forecast this year because of
unseasonally cold weather, the IEA also signalled
that in 2014 emerging economies will drive demand
to a record 92m barrels a day.
The agency said improving prospects for global
economic growth would pull demand, despite
increasing efficiency in energy use in advanced
countries.

But the overall tone of the IEA monthly report
suggested that the oil market is heading into a
sea of uncertainty, partly because oil production
in the United States is "set to grow strongly".

Supply from other countries outside the
Organization of Petroleum Exporting Countries
(OPEC), notably Brazil, Kazakhstan and South
Sudan, would also rise, the agency forecast.
"Emerging markets and developing economies are
forecast to lead demand growth in 2014," the IEA
said.


This would more than offset continued shrinkage of
demand in the 34 countries in the OECD area, with
China forecast to remain "the main engine of
demand growth in 2014."

For this year, because of a big increase in demand
for heating oil in the northern hemisphere in the
second quarter, the agency raised its estimate for
global oil demand by 215,000 barrels a day.

This took the overall estimated annual growth to
930,000 barrels a day, and total consumption to
90.8m barrels a day.

Data show that this figure is a record and the IEA
estimates show demand rising by a further 1.2m
barrels a day next year.

The IEA said that oil prices had risen recently
because of concerns that unrest in Egypt could
affect supplies via the Suez Canal and the SUMED
pipeline which runs from the Gulf of Suez to the
Mediterranean Sea.

"Observers worry that the political confrontation
in Egypt, like the Syrian civil war, could drag on
and worsen before it gets better, and the
instability could theoretically threaten
production and transit through the Suez Canal,"
the IEA said.

Unrest had also disrupted supplies from Libya,
Nigeria and Iraq, the IEA noted.

Another factor was temporary disruption to some
supply routes within the United States.

In June, production by Saudi Arabia had risen by
100,000 barrels a day to 9.7m barrels a day, the
highest level for seven months.

Brent crude climbed to a more than three-month
high of $108.84 a barrel on Thursday amid hopes
that the US Federal Reserve may keep its stimulus
programme for now.

Source - The Telegraph

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