Yesterday the International Energy Agency (IEA) raised its forecast for global oil demand in 2009 and said it expected Chinese oil consumption to increase after the Olympics. Chinese demand “will likely rebound” with the lifting of measures to curb pollution during the Olympics, it said.
Chinese oil demand is expected to increase 5.7% next year as consumers in the world’s fastest-growing major economy spend more on travel.
“We’re still looking at a pretty buoyant picture in 2008, 2009 in China,” David Fyfe, the IEA’s supply analyst, said in a telephone interview. “We are seeing a two-tiered market” with emerging economies surging and developed markets flagging.
The IEA increased its forecast by 70,000 barrels to 87.8 million barrels a day. It projects demand growth for 2009 at 1.1%, while the rate for this year remains unchanged at 0.9 percent.
This comes as no surprise to me. Demand from Asia, particularly China, should not be underestimated. And I still think the IEA’s estimates are way too low.
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That’s 15000 PWE @21.00 Thanks Tom
It’s not just about oil, it’s also about coal. This in my opinion is slightly more likely than oil to bring the system down. Here the effects of export-land model (courtesy Jeffery Brown) are even more pronounced. China consumes
more than 2.5 billion short tons of coal per year. It recently turned a net importer (2008 projected). The world export market is tiny and is less than 12% of the world coal production. China’s coal consumption is rising at a 12-15% compounded annual
rate. China’s coal production growth rate is slowing dramatically and will rise less than 5% this year. Putting these numbers together means that China will swallow all of the worlds exports in 2-4 years. Unless coal production can be ramped up
dramatically elsewhere it is lights out everywhere. And about Uranium: Uranium market is at the mercy of a large amount of non-mine supply. Russia has shown reluctance to part with it and if a worldwide energy crisis is triggered expect the worst from
them regarding honoring and extending uranium supply contracts. Of all the commodities, uranium supply has the longest lead time which would make things a lot worse even if below ground resources are present.