11-12-03 With China's economy expanding rapidly and a recovery simmering in other countries, demand for oil will increase faster than expected this year and in 2004, the International Energy Agency said.
Demand has surged this autumn in the United States and several other industrialized nations, while Chinese demand appears to be advancing "at a breakneck pace," the agency said in its monthly oil market report. Even with consumption on the rise, analysts said oil-producing nations should not have trouble supplying the market with enough fuel to maintain reasonable energy prices for motorists and homeowners.

The global appetite for crude in 2003 will grow by a robust 1.9 %, or 1.44 mm bpd, and in 2004 by 1.5 %, or 1.16 mm bpd. The IEA raised its estimates for daily demand growth in the two years by 160,000 barrels and 90,000 barrels, respectively.
Crude supplies grew only half as fast in November as in October, due partly to a levelling off in production from oil fields in the North Sea, and tightoil inventories have contributed to swings in already-high crude prices. Although OPEC members agreed to cut their production beginning Nov. 1, they still pumped 1.2 mm bpd above their output ceiling, the IEA said.

Analysts say this cushion of excess production has helped somewhat to moderate crude prices ahead of the peak winter demand for heating oil in the northern hemisphere.
"There is more than enough supply" when you take into account non-OPEC production, said Ken Miller, an oil and refined products analyst at the Houston-based consultancy Purvin & Gertz. "Our projection is for oil prices to drop, but not substantially," Miller said. Of course, even if the raw material for heating oil and gasoline is cheaper, factors such as weather and refinery operations also affect retail prices.

The IEA, headquartered in Paris, is the energy watchdog for the world's biggest oil-importing countries.

Source: Xinhua News Agency