Oil Prices Rise on IEA's Bullish Energy Demand Forecasts

[bemildred]

World oil prices climbed after the International Energy Agency made a smaller-than-expected downward revision to energy demand growth, analysts said.

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The IEA reduced its forecast for growth of global oil demand this year by 90,000 barrels per day to 1.26 mln barrels per day.

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However in 2006 demand would grow by 1.75 mln bpd, owing to a rebound from "the largely temporary impact of (hurricanes) Katrina and Rita and a recovery in Chinese demand".

"The IEA says there's going to be a sharp rebound in demand next year, while supply remains tight," Evers said. "1.75 million is quite a big increase when OPEC spare capacity is less than 2.0 million (barrels). So by the end of next year the market is going to be very, very tight."

RigZone

[NickB79]

1. Demand will soon pass capacity

This is the very definition of Peak Oil, yet I still argue with a guy at work that it's all a conspiracy by Saudi Arabia and Venezuala. Argh.

[phantom power]

2. I think the situation is confused by the fact that...

the oil/refinery industry does appear to be artificially driving prices up. Somebody uncovered an "enron" style memo documenting the intentional shutdown of about 25 refineries, specifically to drive up the price of gas by limiting demand.

So, even while peak oil begins to play itself out, there are also actual industry conspiracies to gouge us for all they can.