By Bruce Stanley
The Associated Press
LONDON - With China's economy expanding rapidly and a recovery simmering in other countries, demand for oil will increase faster than expected this year and in 2004, the International Energy Agency said Wednesday.
Demand has surged this autumn in the United States and several other industrialized nations, while Chinese demand appears to be advancing "at a breakneck pace," the agency said in its monthly oil market report.
Even with consumption on the rise, analysts said, oil-producing nations should not have trouble supplying the market with enough fuel to maintain reasonable energy prices for motorists and homeowners.
The global appetite for crude in 2003 will grow by a robust 1.9 percent, or 1.44 million barrels a day, and in 2004 by 1.5 percent, or 1.16 million barrels a day. The IEA raised its estimates for daily demand growth in the two years by 160,000 barrels and 90,000 barrels, respectively.
Crude supplies grew only half as fast in November as in October, due partly to a leveling-off in production from oil fields in the North Sea, and tight oil inventories have contributed to swings in already-high crude prices.
Although OPEC members agreed to cut their production beginning Nov. 1, they pumped 1.2 million barrels a day above their output ceiling, the IEA said. Analysts say this cushion has helped moderate crude prices ahead of the peak winter demand for heating oil in the northern hemisphere.
"There is more than enough supply" when you take into account non-OPEC production, said Ken Miller, an oil and refined products analyst at the Houston-based consultancy Purvin & Gertz.
"Our projection is for oil prices to drop, but not substantially," Miller said.
The IEA, based in Paris, is the energy watchdog for the world's biggest oil-importing countries.
World oil supplies rose in November to 81.7 million barrels a day, up 625,000 barrels a day - or 0.8 percent - from October. OPEC contributed 285,000 barrels of this increase, while non-OPEC producers such as Angola, Brazil and Russia chipped in the rest, the IEA said.
In trading Wednesday in New York, light sweet crude oil for January delivery was up 12 cents to settle at $31.88 a barrel.
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