IEA Summary: Concern over falling oil prices 'overstated'

London (Platts)--10Dec2004

Despite signs that China's oil demand growth continues to cool and stocks are
building, oil-producing countries' concerns about falling prices are over-
stated, as high prices, capacity constraints and strong demand growth all
remain in place for the time being, the International Energy Agency said
Friday.

"Producer concern over a precipitous fall in prices is somewhat overstated,"
the IEA said in its latest monthly report. "$40/bbl oil is still high
and capacity constraints, geopolitical uncertainty and demand growth will
not disappear overnight and will continue to provide price support over the
medium-term," the agency added. The IEA trimmed its world oil demand estimates
for 2005 by 70,000 b/d to 83.7-mil b/d to reflect adjustments to former the
Soviet Union and the Middle East. The 2004 estimate was unchanged at 82.4-mil
b/d, meaning oil demand growth for 2005 fell to 1.4-mil b/d, the IEA said in
its latest monthly report. Chinese demand, however, remains a "significant
risk" in the 2005 demand estimates, the IEA said.

Copyright © 2004 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.