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IEA sees oil demand rising as growth picks up

Global oil demand will rise more quickly this year as economic growth in industrialised countries accelerates, absorbing more supply even as US shale oil production reaches record highs, the West’s energy watchdog said on Tuesday.

The International Energy Agency (IEA) said world oil consumption would increase by 1.3 million barrels per day (bpd) in 2014, 50,000 barrels per day higher than previously forecast.

“Global oil demand growth appears to have gradually gained momentum in the last 18 months, driven by economic recovery in the developed world,” the IEA said in its monthly report. “Most OECD economies have by now largely exited the restraints of recession, with strong gains in some countries in the energy-intensive manufacturing and petrochemical sectors.”

Oil demand growth has been boosted by a robust economic rebound in the United States, where the IEA has revised up its 2013 demand estimate by 180,000 barrels per day to 18.9 million barrels per day. US oil production is increasing rapidly and is forecast to rise by 780,000 bpd this year, but the Organisation of the Petroleum Exporting Countries (Opec) will also have to pump more to meet increasing demand.

The IEA raised its demand forecast for Opec oil this year by 200,000 barrels per day to 29.4 million barrels per day.