The International Energy Agency, an adviser to 26 oil-consuming nations, said world oil demand will rise at an average pace of 2% a year to 2011, as growing demand in China offsets increased production of biofuels.
Demand will reach 93.3 million barrels a day in 2011, the Paris-based agency wrote in a Mid-Term Oil Market report, down 0.4% from a projection of 93.7 million barrels a day in a five-year outlook published in July. Average demand growth of 2% annually is unchanged from a Mid-Term report in July, its first. The IEA said demand from the US, the world's largest energy consumer, will fall by an average of 385,000 barrels of oil a day as oil prices rise, economic growth slows, and consumers switch to biofuels.
The group expects biofuel production to double in the next two years to 1.5 million barrels per day from about 780,000 barrels a day in 2006, the agency said. „Although output and capacity are growing strongly, the short-term economics of first-generation biofuel technology are not yet completely clear,” the IEA said in its report. Increasing biofuel production will boost the Organization of Petroleum Exporting Countries' „effective” spare capacity to produce crude, to 4.4 million barrels a day in 2009 from 2.19 million barrels a day in 2006, the IEA said. After 2009 spare capacity will decline because of delays finishing new oil field projects, the IEA said.
The report said Chinese demand will jump 32% to 9.4 million barrels of oil a day from 7.1 million barrels of oil a day in 2006. The group said it raised Chinese demand estimates by an average of 180,000 barrels a day. The Medium-Term report is intended to bridge the gap between the agency's monthly reports, which give two-year forecasts, and its annual World Energy Outlook, which has forecasts to 2030. (Bloomberg)