In its May Oil Market Report the International Energy Agency (IEA) raised its forecast for 2004 world oil demand by 0.27 mbd. Altogether oil demand growth in 2004 amounts to 1.9 mbd or a change over 2003 of 2.5% resulting in a total demand of 80.6 mbd. In absolute terms the 2004 demand increase represents the single largest annual gain since 1988.
Previous upward revisions to oil demand growth had centred on China but this time increased growth is estimated for North America and Europe.
North America will in 2004 have increased oil demand by 1.6%, Europe by 1.5%, China by 13.6%, other Asia by 5.1%, Middle East by 4.9% Africa and Latin America by 1.7%. Oil demand is set to decline by 2% in the Former Soviet Union and by 1.6% in OECD Pacific.
Soaring demand for transportation fuels has led to the increase in OECD oil deliveries. Aggregated March demand for gasoline and diesel in the nine largest OECD economies grew by close to 1 mbd year-on-year, while that for jet fuel-kerosene posted the steepest gain in a year. Chinese oil demand expanded
by nearly 1 mbd in the first quarter of 2004 and is expected to rise even faster in the second quarter. Growth is currently forecast to slow in the second half of the year, but a high-case scenario of 1 mbd or more annual growth cannot be ruled out.