IEA medium-term update hikes oil demand projection

The International Energy Agency has raised its projection for average global oil consumption during 2009-14 by 1.9 million b/d in an update to the medium-term market forecast it published last June.

Dec 11th, 2009

By OGJ editors
HOUSTON, Dec. 11
-- The International Energy Agency has raised its projection for average global oil consumption during 2009-14 by 1.9 million b/d in an update to the medium-term market forecast it published last June.

The update appeared in IEA’s December Oil Market Report.

The increase in projected demand from the June forecast reflects stronger economic growth in 2009-10 than was assumed in June plus the effects of economic and fiscal stimulus programs, especially among members of the Organization for Economic Cooperation and Development.

In IEA’s high-growth scenario, with global gross domestic product increasing at an average rate of 3.2%/year, worldwide oil demand rises to 90.9 million b/d in 2014 from 86.2 million b/d in 2008.

In a lower-growth case, in which GDP rises 2.2%/year, global oil demand reaches 87 million b/d in 2014.

IEA’s updated oil-supply projection for 2008-14 is an average 1.1 million b/d higher than in June, with more crude and NGL expected from members of the Organization of Petroleum Exporting Countries than in the earlier forecast. Much of the increase occurs late in the forecast period as previously deferred projects are revived and come on stream.

In the higher-GDP scenario, global non-OPEC supply plus OPEC production capacity rises from 90.94 million b/d in 2009 to 95.6 million b/d in 2014, with implied spare capacity among OPEC members of 6.08 million b/d in 2009 and 4.74 million b/d in 2014.

The non-OPEC global supply numbers include NGL production by OPEC members of 4.86 million b/d in 2009, rising to 7.35 million b/d in 2014.

They also include biofuels supply expectations raised by an average of 35,000 b/d over 2008-14 from the June projection. IEA expects global biofuels production to rise from 1.6 million b/d in 2009 to 2.2 million b/d in 2014.

IEA hiked its projection for refining capacity growth by 1.1 million b/d from the June report to 8.7 million b/d for 2008-14.

Dominating growth are China, 2.9 million b/d; other Asia, 2.1 million b/d; and the Middle East, 1.5 million b/d.

IEA said delays on some large refining projects proved shorter than it originally assumed.

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