BP sees 'no material slowdown' in global oil demand

London (Platts)--25Oct2005

BP, the world's second-largest oil company by market value, sees "no
material slowdown" in global oil demand because of near-record prices, the
company's chief financial officer said Tuesday.

     "There's been a lot of speculation that the higher prices would put a
brake on consumption," CFO Byron Grote said. "Although there tends to be
various anecdotal evidence to support that, when we look at the main figures,
we're not seeing any material slowdown at all on the demand across the globe."

     Crude oil has been falling from a record high of $70.85/bbl reached Aug
30 in New York, partly on expectations the price rally will lead to "demand
destruction." BP's comment will bolster the case of traders and analysts
arguing there is insufficient evidence so far of demand falling.

     BP is one of the world's largest fuel retailers, selling fuel at a
worldwide network of 26,800 service stations. Refining oil and selling fuel is
the company's second-largest business after producing oil and gas. 

     Crude in New York rose Tuesday, gaining 88 cts to $61.20/bbl at 1505 GMT,
as cooler US Atlantic Coast weather spurred buying interest in heating oil.
     
     DEMAND DIP?

     Forecasters such as the International Energy Agency and OPEC have
trimmed demand estimates for 2005, citing high prices. In the US, government
data last week showed a 3.2% drop in petroleum supplied in the past four
weeks.

     But BP's Grote, discussing BP's third-quarter earnings on a conference
call, said demand changes were not significant. "With respect to demand, we
don't see anything material happening out there," he said.

     Some oil analysts are not convinced demand is falling due to high prices.
For example, figures from the US Energy Information Administration on product
supplied measure supply to the market, not actual use.

     "There have been increasing signs of diminished demand, though some have
argued that the decline is in fact artificial on account of misread supply
data," brokerage Refco said in a report. 

--Alex Lawler, alex_lawler@platts.com

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