Tags: Energy Panel Global Oil Use to Rise in 2011 on Better Economy

Energy Panel: Global Oil Use to Rise in 2011 on Better Economy

Tuesday, 09 Nov 2010 02:16 PM

Global oil demand next year will be higher than previously thought, thanks to stronger economic growth, the U.S. government's energy forecasting agency said Tuesday.

The U.S. Energy Information Administration boosted its 2011 world oil demand growth forecast by 33,000 barrels per day, or bpd, to 1.44 million bpd, with fuel use next year now pegged at nearly 87.8 million bpd.

"Growth in global oil consumption remains strong," the EIA said in its monthly report. "China, the Middle East and Brazil represent most of the expected growth in world oil consumption in 2011."

The EIA's forecast is the first of three market-sensitive global oil supply and demand forecasts coming out this week. OPEC releases its outlook on Thursday, followed by the International Energy Agency on Friday.

In last month's forecast, the IEA lowered its world oil demand growth estimate for 2011 by 60,000 bpd to 1.21 million, expecting demand next year to average 88.16 million bpd. OPEC said it expected global oil use to reach 86.64 million bpd in 2011, up 1 million bpd from this year.

The EIA said in its new forecast that U.S. oil demand will grow next year by 120,000 bpd after increasing by 260,000 bpd this year. U.S. fuel use during the second half of this year has been especially strong, rising 520,000 bpd from the same period in 2009.

The higher oil demand follows government data that shows the U.S. economy is creating more jobs than expected and the Federal Reserve's plan to buy $600 billion in bonds. As the economy improves, energy use increases.

Stronger demand usually means higher prices. The EIA said it expects U.S. oil prices to average about $83 a barrel this winter, up $5.50 from last winter, and then gradually rise to $87 in the fourth quarter of 2011 as U.S. and global economic conditions improve.

Higher oil costs will be passed on consumers at the pump, with retail prices for gasoline next year forecast at an average $2.97 a gallon and $3.19 for diesel fuel.

On the supply side, the EIA sees a bigger decline in non-OPEC oil production next year after a huge jump in output this year.

The EIA said non-OPEC crude oil production next year will fall by a further 10,000 bpd from the agency's prior estimate. It now expects non-OPEC oil output to fall by 250,000 bpd next year to an average 51.22 million bpd.

The drop in 2011 output is due to declining total North American and North Sea oil production and decreasing supplies from Russia, the agency said.

For 2010, the EIA increased its forecast growth in non-OPEC oil output by 110,000 bpd, with production increasing by 1.01 million bpd to 51.47 million bpd this year.

Most of this year's production increase comes from the United States, Brazil and the former Soviet Union, the EIA said.

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Global oil demand next year will be higher than previously thought, thanks to stronger economic growth, the U.S. government's energy forecasting agency said Tuesday. The U.S. Energy Information Administration boosted its 2011 world oil demand growth forecast by 33,000...
Energy Panel Global Oil Use to Rise in 2011 on Better Economy
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2010-16-09
Tuesday, 09 Nov 2010 02:16 PM
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