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Oil Demand to Outpace Supply Growth in the Medium-Term - IEA

Posted on: Thursday, 3 July 2008, 09:01 CDT

The International Energy Agency has indicated in its medium-term assessment that global supply will find it hard to meet sharply rising demand over the next five years, contrary to expectations in some industry quarters that conditions may soften to bring down the record-high oil prices, according to Dow Jones.

The agency's assessment, which forecasts conditions through to 2013, sees no respite for consumers as oil supplies will be strained even further, even though demand could fall as a result of weaker economic growth.

The International Energy Agency (IEA) has indicated that robust demand in Asia, the Middle East and Latin America, is outpacing supply growth. The agency noted that worldwide supply capacity is projected to rise to 96.2 million barrels per day in 2013 from 90.4 million barrels in 2008, according to the news source.

The agency has predicted that most of the supply growth is expected to come early and fall sharply during 2011-13, with capacity growth at around one million barrels per day per annum.

The IEA also noted that the shortage of refining capacity is also playing its part in increasing oil prices, as demand is surging for distillate fuels such as diesel, jet fuel and kerosene.

Natural gas shortages, diesel shortages in China and tightening European regulations on sulphur levels in diesel are contributing to the rise in oil prices, according to the IEA.

Source: Datamonitor

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