World oil demand growth, led by China and the United States, will nearlydouble in 2007, putting pressure on Opec producers to boost production later this year, a Reuters poll found on Thursday.
“The Organisation of Oil Producing Companies is going to have to boost output in the second half of the year since non-OPEC supply growth will be unable to meet global demand,” said Mike Wittner, analyst at investment bank Calyon.
Analysts forecast average world oil demand growth this year at 1.39 million barrels per day. That is up from 800,000 bpd last year, according to the International Energy Agency.
The poll also showed demand for Opec crude oil rising 270,000 bpd to 30.38 million bpd. “Unless Opec production is permitted to rise in the coming months, oil prices could once again set off in an upward direction as refiners chase scarce barrels to meet summer demand,” the Centre for Global Energy Studies said in a recent oil report.
Opec sources of more than a third of the world’s oil, pledged to reduce supply by 500,000 bpd from 1 February, in addition to a 1.2-million-bpd cut that took effect in November.
Several Opec ministers have indicated that Opec would keep oil output unchanged when it meets on 15 March in Vienna if prices remained at current levels. Oil has traded above $60 (Rs2,640) a barrel for the past few weeks, rebounding around 20% from mid-January, but still far from last year’s record peak of $78.40.
Analysts forecast prices to average $61.29 this year, down from 2006’s average of $66.24 a barrel. Demand from China, the world’s second largest energy consumer, was forecast to rise 430,000 bpd this year to 7.57-million-bpd. That is up from 400,000 bpd last year, according to IEA estimates.
“We believe that there is no other demand-side force with greater impact on the global oil supply-demand balance than growth in Chinese oil demand,” said Lehman Brothers in a research note.
Oil consumption in the US, the world’s top energy user, is also expected to surge this year.“There was a decline in US growth last year and this year we see it increasing, so that is a big swing for demand,” said Sarah Emerson, director of Energy Security Analysis Inc.