Global oil demand expected to jump

May 13, 2004

By Alejandro Barbajosa and Sri Jegarajah

London - Crude oil futures hit fresh 13-year highs in London yesterday after the International Energy Agency (IEA) said this year's increase in global oil demand would be the largest rise in absolute terms since 1988, driven by accelerating economies and surging use in China.

The forecast rise in demand comes amid concern that Opec cannot supply enough crude oil to meet demand. The cartel's actual output leaves spare capacity equivalent to about 4 percent of forecast global oil demand.

In its monthly report, the IEA said global use of petroleum fuels would average 80.6 million barrels a day this year, 270 000 more than it forecast last month. This is a rise of 1.95 million barrels a day from last year. Last October it was forecasting a rise of 1.06 million barrels a day.

The expected growth in demand this year would be the largest in absolute terms since 1988, the report said. In percentage terms, it matched the 2.5 percent rise last seen in 1996.

Brent crude for June delivery rose 22c to close at $37.58 (R255) a barrel in London. In after-hours trade Brent surged to $37.82

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