MercoPress. South Atlantic News Agency

World oil demand forecasted to grow 2.2% in 2006

A rebound in Chinese demand growth and a stronger consumption in United States will push world demand for oil in 2006, estimated to increase 2.2% according to the monthly report from the International Energy Agency, IEA. In 2005 oil demand expanded 1.3% over 2004.

The average daily world oil consumption is estimated in 85.1 million barrels with a peak in the fourth quarter, 86.9 million bpd, which will require additional supply from OPEC (Organization of Oil Exporting Countries). However IEA estimates that the oil supply from OPEC and non OPEC members during 2006 should balance the expected demand.

Basically this means OPEC should average a production of 28.6 million bpd, which means a 200.000 bpd increase over 2005

However oil markets are already nervous because of the Nigerian situation which has forced evacuation of personnel from some areas and the confrontation of Iran with United States and the European Union over the development of nuclear resources.

Last year OPEC pumped almost full capacity in an effort to calm energy markets which did not impede prices from reaching a historic maximum of 70.85 US dollars the barrel.

Total world supply in 2005 reached 84.1 million bpd, just managing demand which decelerated 90.000 bpd to 83.3 million bpd following the demand contraction caused by the Katrina and Rita hurricanes in United States. AIE also warned that expectations of a seasonal consumption drop in the second quarter should be managed prudently.

"Everybody is talking about the second quarter but it's essentially a regional issue and concentrates on products demand and not in crude demand which is totally different", warned Lawrence Eagles head of AIE oil markets division.