Oil Outlook 2006
Date: Tuesday, November 22 2005
Oil Outlook 2006
Paul Maidment, 11.16.05, 9:00 AM ET
We are consuming oil faster this year than previously thought--and there's no sign of slowing down. In fact, the International Energy Agency (IEA) now forecasts that the world will consume 115.4 million barrels per day by 2030, up from 82.1 million barrels per day in 2004.
This demand surge has combined with supply-threatening political uncertainties in the Middle East as well as natural disasters in the United States' Gulf Coast region, to drive crude oil to prices not seen before.
This brief looks at the factors and actors behind today's high oil prices. Click on any link below to go directly to that section. World oil demand will increase by 1.2 million barrels per day this year, growing at an average annual growth of 1.5%, according to the IEA.
The world oil demand will likely continue to expand as industrializing countries such as China and India increase the energy intensity of their economies. The IEA forecasts the world will consume 82.5 million barrels per day in the third quarter of this year, 1% more than in the same quarter of 2004. The IEA says the world will consume 115.4 million barrels per day by 2030, growing at an average annual rate of 1.3% from the 82.1 million barrels per day the world consumed in 2004.
Stocks of oil are low by historic standards and shrinking, removing a cushion between demand and supply.
Oil companies are holding lower inventories of oil than in the past as part of efficiency and cost-cutting measures. OPEC has kept its stocks low as a matter of policy.