(EnergyAsia, July 31 2014, Thursday) — Global oil demand will reach a new record high of 94.08 million b/d in 2015, rising more than 1.5% from this year’s projected 92.67 million b/d, said the International Energy Agency (IEA).

In its first crystal ball gaze into next year’s markets, the agency said developing Asia led by China will provide most of the growth with a 3.6% increase from this year’s 22.5 million b/d consumption to 23.31 million b/d in 2015.

Africa will be the fastest growing oil market as it pushes past the four-million b/d mark for the first time, rising from 3.88 million b/d in 2014 to 4.06 million next year. Oil consumption growth in the Middle East (3.17%) and Latin America (2.21%) will also sharply outpace the global average.

Despite the political turmoil in Ukraine and other former Soviet states, the bloc is expected to increase oil consumption by 1.7%, thanks largely to the performance of Central Asia’s fast growing economies that have largely been spared of major conflicts.

In its July report, the IEA did slightly lower its forecast for this year’s global oil demand to  92.67 million b/d compared to its previous month’s call for 92.76 million b/d. It cited “weaker‐than‐expected” conditions in Europe and China that has prompted the IMF to hint that it might trim forecasts for economic growth.

The IEA said the oil industry faces increasing risks and geopolitical uncertainty in Iraq, Ukraine, Libya, Nigeria and Venezuela that could have significant impacts on the global economy.

Worries over Middle East oil supplies have subsided in recent weeks after the initial alarm over the rise of the extremely violent Al Qaeda offshoot Islamic State previously known as ISIS which took over some oil-producing parts of Iraq and Syria.

Reports that rebel forces in eastern Libya had lifted a months‐long blockade of the Ras Lanuf and Es Sider terminals raised hopes that the North African country could soon restore long‐disrupted crude oil exports.

“Oil futures surged in mid-June by US$5 per barrel to a nine-month high of more than $115 for Brent as Islamist forces gained ground in Iraq, but later reversed their gains on confidence that Baghdad’s southern fields would remain untouched and improved prospects for a recovery in Libyan exports,” said the IEA. On July 30, North Sea Brent fell back to just over $105 per barrel while US WTI slipped below US$100.

But the agency also warned that the market may just be going through “a soft patch” as prices remain historically high with no signs yet of a sustained bearish turn.

“Supply risks in the Middle East and North Africa, not least in Iraq and Libya, remain extraordinarily high. The oil outlook for 2015 also does not suggest any letup in market conditions,” it said.

The IEA expects non‐OPEC supply to grow by 1.2 million b/d in 2015, down slightly on 2013 and 2014 forecast levels.

“Global supplies were largely unchanged  month‐on‐month  in  June,  at  92.6 million b/d,  but  995,000 b/d  higher than a year ago. Annual non‐OPEC output growth of 1.7 million b/d  more than offset OPEC declines of 765,000 b/d,” it said.

July 2014
2013        2014        2015        2015/2014
Americas                 24.01        24.12        24.14        0.08%
Developing Asia    21.82        22.50        23.31        3.60
MidEast                    7.97          8.19          8.45        3.17
Latin America         6.61          6.78          6.93        2.21
Former SU              4.61          4.69          4.77        1.71
Africa                       3.71          3.88          4.06        4.64
Others                   22.71        22.51        22.42        -0.40
TOTAL                 91.44        92.67        94.08        1.52%

June 2014
2012        2013        2014        2014/2013
Americas                 23.62        24.01        24.11        0.42%
Developing Asia    21.28        21.80        22.51        3.26
MidEast                     7.75          7.96          8.22        3.27
Latin America          6.39          6.59          6.77        2.73
Former SU               4.49          4.61          4.68        1.52
Africa                        3.63          3.74          3.91        4.55
Others                    23.03        22.72        22.56        -0.07
TOTAL                   90.19        91.43        92.76        1.45%