London: Global oil demand will increase more this year than previously forecast, the International Energy Agency (IEA) said. A ban on US crude exports may crimp output growth, the Paris-based group said.
World consumption will climb by 1.3 million barrels a day, or 1.4 per cent, to 92.5 million barrels a day, the IEA said yesterday in its Oil Market Report.
The increase of 90,000 barrels a day from last month is the first year of annual demand growth in developed nations since 2010, it said. US restrictions on exports may mean its surging domestic production hits a "crude wall" that curbs further expansion, the IEA said.
"Upside risks to oil demand growth are much more relevant this year than the same period last year, where concerns were for downside risks to materialise," Miswin Mahesh, an analyst at Barclays in London, said by e-mail on Monday. "Demand- supply metrics in the oil market are moving toward a relatively better equilibrium this year as further North American production gets on board."
Brent crude has lost 4.3 per cent in the past year, trading at $106 a barrel in London yesterday, as burgeoning North American shale output curbs import from the US, the world's biggest oil user. Prices have also retreated as a temporary agreement on Iran's nuclear programme eased concern that tensions in the region could escalate and as Libya set about restoring production curtailed by protests.
Higher forecasts for global fuel demand prompted the IEA to increase estimates for the amount of crude needed from the Organisation of Petroleum Exporting Countries. Opec's 12 members, responsible for about 40 per cent of global oil supplies, will need to provide an average of 29.4 million barrels a day in 2014, or about 200,000 a day more than the IEA had forecast in last month's report.
Opec's production was about 400,000 barrels a day higher than the demand for its crude in December, according to the IEA. The group's supply rose for the first time in five months, increasing by 310,000 barrels a day to 29.82 million a day because of higher output from Saudi Arabia, the biggest member and de facto leader, and the United Arab Emirates. Opec will next meet on June 11 in Vienna.
Saudi Arabia boosted output by 75,000 barrels a day to 9.82 million a day last month, the IEA said.
Production in Iran, which in November secured some sanctions relief in exchange for temporarily curbing its nuclear programme, rose by 40,000 barrels a day last month to 2.75 million a day. Iraq was the only Opec member where production fell in December, declining by 25,000 barrels a day to 3.07 million a day.
Total oil inventories in the most developed nations are the furthest below their five-year average in more than a decade, according to the IEA.