Oil supply risks offset higher capacity, underpin prices: IEA
October 13, 2012, 12:06 am TWN
PARIS--Growth of global thirst for oil should slow to 2016, the International Energy Agency (IEA) said on Friday, but Middle East tension and supply risks might prevent prices from falling.
The IEA now expects global demand for oil to grow by half a million barrels a day less than previously estimated.
It stressed uncertainty on every front and said that the oil market was now at a “crossroads.”
But global thirst for oil will still increase by 1.2 percent or 1.1 million barrels a day (mbd) per year over the next five years, to 95.7 mbd from 89 mbd in 2011, a statement said.
The IEA spoke cautiously of a “seemingly more benign medium-term market outlook,” based in part on increased OPEC output.
The agency set its outlook “against the backdrop of sluggish economic growth and increasing energy efficiency,” particularly in advanced economies.
There was great uncertainty over the trend of prices, which remained firm because of potential threats to Gulf supplies, the agency said, a result of sanctions on Iran related to Tehran's nuclear ambitions.
The agency highlighted a major shift in energy production owing to the development of North American resources which have resulted in “some of the lowest energy costs on the planet in the form of cheap natural gas.”