IEA Boosts 2014 Global Oil Demand Forecast on U.S. Recovery

IEA Boosts 2014 Global Oil Demand Forecast on U.S. Recovery (Bloomberg)

Global oil demand in 2014 will top previous forecasts, with U.S. consumption rebounding to its strongest level in five years, the International Energy Agency (IEA) announced today. The IEA estimated in its monthly oil market report that demand will rise by 1.2 million barrels a day, or 1.3 percent, to 92.4 million a day next year. That projected demand is up from last month by 240,000 a day. U.S. fuel use rose above 20 million barrels a day in November for the first time since 2008, according IEA’s preliminary data. While the agency boosted its forecast for the crude volume OPEC will need to supply, “making room” for the potential return of Iranian exports “could be a challenge for other producers” in the group, IEA concluded. Brent crude futures have slipped 1.4 percent this year, trading at about $110 a barrel in London today amid reduced fuel use and fading concern that tensions with Iran will spark a conflict and disrupt Middle Eastern crude exports. A “reasonably robust recovery” and lower gasoline prices in the United States are helping stoke demand in the world’s largest oil user, the IEA said. Indeed, oil product inventories in the most industrialized economies have “plummeted” as demand in these nations expanded in the second quarter after eight consecutive quarterly declines, the Paris-based adviser to energy-consuming nations said. Stockpiles of crude and refined products dipped to 2.7 billion barrels in October, or 19.7 million less than their five-year average.