Fall-off in demand for oil is temporary, says IEA
FT.com / International Economy / Oil - Fall-off in demand for oil is temporary, says IEA
By Carola Hoyos and Joanna Chung in London
Published: October 11 2005 20:26 | Last updated: October 11 2005 20:26
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, the International Energy Agency, the industrialised countries' watchdog, said on Tuesday.
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The forecast pushed futures prices in New York and London up by more than $1. US benchmark crude oil futures rose $1.30 to $63.10 in early afternoon trading.
Oil consuming countries seeking to diversify their supplies will in fact have to rely more on the Organisation of the Petroleum Exporting Countries, the IEA added. Growth in oil supply from outside Opec is expected to fall to a six-year low this year, largely because of the shutdown in production caused by hurricanes Katrina and Rita in the US Gulf of Mexico in August and September.
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.
The continuing likelihood of high oil prices could harm the credit worthiness of oil-reliant emerging economies, such as those of Pakistan, Turkey and Lebanon, Standard & Poor's, the credit rating agency, is expected to warn in a report today.
Some consumers, however, have found creative ways to lower their energy bills. The IEA has also contributed to the softening in oil prices through its release of emergency supplies of oil and petroleum products in response to the hurricanes.
By Carola Hoyos and Joanna Chung in London
Published: October 11 2005 20:26 | Last updated: October 11 2005 20:26
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, the International Energy Agency, the industrialised countries' watchdog, said on Tuesday.
ADVERTISEMENT
The forecast pushed futures prices in New York and London up by more than $1. US benchmark crude oil futures rose $1.30 to $63.10 in early afternoon trading.
Oil consuming countries seeking to diversify their supplies will in fact have to rely more on the Organisation of the Petroleum Exporting Countries, the IEA added. Growth in oil supply from outside Opec is expected to fall to a six-year low this year, largely because of the shutdown in production caused by hurricanes Katrina and Rita in the US Gulf of Mexico in August and September.
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.
The continuing likelihood of high oil prices could harm the credit worthiness of oil-reliant emerging economies, such as those of Pakistan, Turkey and Lebanon, Standard & Poor's, the credit rating agency, is expected to warn in a report today.
Some consumers, however, have found creative ways to lower their energy bills. The IEA has also contributed to the softening in oil prices through its release of emergency supplies of oil and petroleum products in response to the hurricanes.
posted by Marcel at 3:48 PM
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