IEA Forecasts Small Growth in Oil Supply Outpacing Slighter Growth in Demand

12 May 2005

In its current Oil Market Report, the IEA noted that demand growth for oil is easing in China, the US and Europe. This easing in pressure was offset by increased demand in Asia-Pacific countries, the Former Soviet Union, and the Middle East.

Overall, the IEA nudged up its estimate of demand growth for the year by 0.1 percentage point from last month’s forecast to 2.2% from 2.1%. This rounds off to 84.3 million barrels per day.

World oil output rose by 435 kbpd to 84.5 mbpd in April, primarily due to higher OPEC supply.

OPEC crude supply rose by 480 kbpd in April to 29.4 mbpd, from a lower March base. Iran, Saudi Arabia, UAE, Kuwait and Nigeria underpinned April’s increase.

The IEA forecasts a growth in non-OPEC supply of 55 kbpd for the year despite weak growth in the first half of 2005, with higher expectations for China, Vietnam and Yemen.

The cooling of growth in demand coupled with the increase in production pushed the global supply-demand balance barely over into the positive side for the first time this year by 200 kbpd (0.2% of projected demand).