Oil Prices: World Oil Demand.

High oil prices in 2000 have caused world oil demand to decline in recent months. The rate of growth of global demand from 1999 to 2000 was 1.6%, i.e., by 1.2m b/d from 74.7m b/d to 75.6m b/d, according to the Paris-based IEA. The IEA has forecast global oil demand in 2001 at 77.5m b/d, up 1.9% on 2000.

Oil demand in the US fell in the past five months, with refining margins having dropped by $4.b on the US Gulf coast since the summer. US oil demand growth turned out to be slower than forecast in late 1999, and it peaked in mid-2000. A projection by the Energy Department's EIA that US demand in 2001 would rise by 1.7%, 330,000 b/d, was based on an optimistic economic growth of 3.8%. In the first 11 months of 2000, US demand rose by a mere 0.3%, despite an annual economic growth of more than 4%. High gasoline prices stretched the limits of US consumer tolerance. As result demand for the mogas has fallen.

EIA's recently-issued Annual Energy Outlook says US imports of crude oil and refined products will rise 25% by 2020 and will account for 64% of oil demand, which by then will have reached 25.8m b/d, up from 19.5m b/d (51%) at present. The increase will average 1.3% per annum.

The IEA has estimated 2000 oil demand in North America at 24.07m b/d, up 0.8% from 1999 compared to a 3.2% growth in 1999. It says this should rise by 2.1% in 2001 to 24.57m b/d.

Oil demand in Europe has fallen as well, and in Germany the fall in recent months was 6% from 1999. According to the IEA, European demand in 2000, at 15.82m b/d, fell by 0.2% (30,000 b/d) from 1999 compared to last year's fall by 1.1% from 1998. In 2001, it says, European demand will grow 1.5%, i.e, by 240,000 b/d, 16.06m b/d.

Asian/Pacific oil demand so far this year grown by 1m b/d to 21.1m b/d. But high oil prices have begun to put a brake on Asian economic growth. The World Bank on Dec. 5 said in its annual survey of developing economies that South Asia, one of the energy import-intensive regions, is struggling with external finance difficulty. Energy constitutes 20% of total imports and India and 15% in Pakistan.

According to the IEA, the OECD Pacific region's oil demand in 2001 will rise by 270,000 b/d (3.1%) to 8.92m b/d. It says the small increase reflects a "greater than anticipated weakness in Japan". The region's oil demand had risen by 2.6% in 1999 and a mere 0.3% in 2000. Oil demand in China, which grew by 7% in 1999 and 6.9% in 2000 to reach 4.79m b/d, will rise by 290,000 b/d (6%) in 2001, the IEA says. Demand by the other non-IEA Asian countries grew by 4.3% in 1999 and by 2.6% in 2000 to reach 7.22m b/d, according to the IEA, which says in 2001 the growth rate will be 5% (360,000 b/d).

The IEA has put oil demand in the former Soviet Union at 3.49m b/d in 2000, having fallen by 0.2% from 1999 - with 1999 demand having fallen by 6.2% from 1998 - and in 2001 it should fall by 2% to 3.42m b/d. It puts 2000 demand in the Middle East at 4.34m b/d, up 1.9% from 1999, and says this should rise by 3.9% in 2001 to 4.51m b/d. The agency put 2000 demand in Africa at 2.34m b/d, up 1% from 1999, and this should rise by 2% in 2001 to 2.39m b/d. It estimates 2000 demand in Latin America at 4.84m b/d, up 1.5% from 1999, and says this should rise by 3% in 2001 to 4.99m b/d.