In the first IEA forecast for 2011 the firm predicted oil demand would increase by 1.6% due to growth in developing economies. This compares to the IEA forecast for +2.1% growth in 2010.
The International Energy Agency (IEA) said worldwide oil consumption would rise by 1.3 million barrels per day to average 87.8 mbpd in 2011. The estimate for 2010 was left unchanged at 86.5 mbpd. The estimate for 2010 growth remains higher simply because of the large decline in 2008-2009. This is rebound growth while 2011 will be economic growth.
The IEA said the OECD countries would continue a period of slow growth or even decline in some nations because of a shift away from high oil consumption into higher efficiency vehicles and energy uses.
China was expected to account for 30% of the 2011 demand growth but even China's demand was expected to slow as a result of economic pressures to slow the economy in China. The country of 1.6 billion people is the world's second largest oil user and saw demand rise +50% in 2010. China had a huge stimulus program and unlike the one in America the money was spent immediately and actually catapulted the country back onto a strong growth path.
The IEA said Chinese oil demand would rise just 4.8% in 2011 compared to 9.1% in 2010. The U.S. is expected to consumer only 18.86 mbpd in 2011. That is less than 2010.
OPEC demand is expected to grow to 29.2 mbpd in 2011. This is 400,000 bpd more than the 2010 average. What the IEA did not say was that OPEC nations will probably see internal demand climb significantly more than that 400,000 more barrels they will supply to the rest of the world. The ten OPEC nations with quotas supplied 26.6 mbpd in June. That was 40,000 bpd more than the existing quotas. That alone is an amazing statistic given their normal urge to cheat. Apparently they are happy with $75 oil and don't want to push prices down by cheating on production. Output from all 12 members fell -60,000 bpd in June to 28.9 mbpd.
The IEA also said OPEC would continue to have 5.5 to 6.0 mbpd of excess capacity in 2011. Most of that capacity is in Saudi Arabia. The ruler of Saudi Arabia said again last week that he is putting a halt to any new exploration in order to save some oil for future generations. It is unsure how serious that pledge will be since he said it in 2007-2008 as well.
The IEA said capital expenditures fell by 20% in 2009 and rebounded only 10% in 2010.
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