BP: World oil demand growth rate weakened in 2006

Global demand for oil in 2006 saw its weakest growth rate since 2001, at 0.7% or half the average for the past decade, according to BP PLC's Statistical Review of World Energy 2007, released by the company June 12.

Uchenna Izundu
International Editor

LONDON, June 13 -- Global demand for oil in 2006 saw its weakest growth rate since 2001, at 0.7% or half the average for the past decade, according to BP PLC's Statistical Review of World Energy 2007, released by the company June 12.

The main factor behind the slowdown, the report said, was that oil consumption of Organization for Economic Cooperation and Development member countries fell by 400,000 b/d in 2006—the first decline in more than 20 years, due largely to high oil prices.

Global oil production increased by 0.4% to 81.7 million b/d, but weak oil demand meant that the Organization of Petroleum Exporting Countries reduced production late in 2006 for the first time in nearly 2 years. "For the year as a whole, OPEC increased its production by an average 130,000 b/d to 34.2 million b/d," BP said.

Russia, Azerbaijan, and Canada produced the most oil outside of OPEC members. Russia alone increased oil production by an additional 200,000 b/d. Outside of OPEC, output was up some 300,000 b/d in 2006, though this rise was less than half the 10-year average. Oil production fell in the UK for the seventh year consecutively and in the US for the sixth year in a row.

However, global natural gas consumption increased by 2.5% in 2006, driven by demand growth in Russia and China. BP's review showed that gas demand fell in the US and Europe. Europe experienced high prices and warmer-than-normal weather. "Russian gas demand, almost as large as the total consumed by the whole Asia-Pacific region, increased by some 7% in 2006, accounting for 40% of the global increase," BP said.

China consumed 55.6 billion cu m of gas in 2006, which was a 20% rise on 2005. Russia was an important gas producer in 2006 and contributed to the 3% rise in global gas production. The US also staged a recovery following the severe hurricane damage in 2005.

For the second year in a row, world energy growth slowed, rising by 2.4%, down from 3.2% in 2005. BP attributed the trend to high energy prices.

Contact Uchenna Izundu at uchennai@pennwell.com.

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