Stronger Rise in Oil Demand Seen
U.S. and world oil demand growth in the second quarter is expected to be stronger than previously forecast, the Energy Information Administration said Tuesday, which could affect OPEC’s decision on whether to cut oil output during the period.
In its monthly forecast, the Energy Department’s analytical arm increased its estimate for U.S. oil demand growth during the April-June period by 180,000 barrels a day to 20.91 million barrels and raised its projection for total world oil demand growth in the period by 200,000 barrels a day to 83.8 million barrels.
The forecast rise in oil consumption could influence the Organization of the Petroleum Exporting Countries as it meets again in March to review its crude production levels for the second quarter, when petroleum demand is usually weaker.
When OPEC oil ministers last met Jan. 31, cartel member Venezuela said it expected that the group would cut its oil output by as much as 1 million barrels a day at the March meeting.
Meanwhile, Saudi Arabia’s petroleum minister said Tuesday that the world’s top oil exporter would continue to bolster its output capacity to quell global shortages but had “concerns” about the Bush administration’s call to cut America’s addiction to Middle East oil.
Saudi Arabia, OPEC’s de facto leader, plans to boost production capacity to 12.5 million barrels a day from 11 million barrels by 2009. Saudi Aramco, the government-owned oil company, also plans to spend billions of dollars to add about 300,000 barrels a day of fuel-making capacity to an unspecified Gulf Coast refinery.
“We will continue to be a source of stability for world energy markets,” Saudi Oil Minister Ali Ibrahim Naimi said at an energy conference hosted in Houston by Cambridge Energy Research Associates. “We are addressing the problem of availability head-on.”
But, when asked whether there were plans to boost capacity even more, Naimi made a reference to President Bush’s State of the Union pledge to slash U.S. oil imports from Middle East suppliers by 75% by 2025.
“What concerns us is all the talk about not wanting our oil,” Naimi said. “It’s not a major bump; it’s something to take into consideration.”