Oil Demand Expected To Stay High

The International Energy Agency have just published their forecast for oil demand next year, and its more of the same, with the emphasis on more.

Global oil consumption is expected to increase by 1.75m barrels a day next year to total 85.2m b/d, suggesting that a recent fall-off in demand is temporary… For 2006, the IEA revised its forecast of non-Opec supply down 335,000 b/d to an average of 50.3m b/d.

Delays and declining production in Canada, the UK, Asia and Sudan are expected to damp production growth next year. The massive damage to platforms and rigs caused by Katrina and Rita will be felt outside the US as well, increasing costs and causing rig shortages in places such as the Middle East, where two of the rigs damaged by Rita had been scheduled to move this year.

At the same time, the world’s thirst for oil shows few signs of abating, despite high prices. The IEA said that weakening of demand this month was likely to be a short-lived side effect of bottlenecks in distribution caused by the US hurricanes.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".