World oil demand will grow substantially in 1994-95 as economies strengthen in Organization for Economic Cooperation and Development and developing countries, U.S. Energy Information Administration predicts.
EIA predicts world oil demand will have risen an average of 890,000 b/d/year during 1993-93, after little or no growth the preceding 2 years.
It said oil demand will grow the most in developing countries, especially in Asia. After rising by 1.1 million b/d in 1993, demand in developing countries is expected to rise 540,000 b/d in 1994 and more than 700,000 b/d in 1995.
In OECD countries, oil demand is expected to rise about 630,000 b/d in 1994, led by the U.S., and by 410,000 b/d in 1995, mostly outside the U.S.
"Demand in the former Soviet Union and eastern Europe is expected to continue declining, but at a slower pace than the 1.1 million b/d drop in 1993, as those countries attempt to move toward western style economies," EIA said.
OIL PRICES
EIA noted world oil prices in the first quarter of 1994 were at their lowest point since 1988. It said the average cost of imported crude for U.S. refiners is expected to rise gradually from $13[bbl in the first quarter to $17/bbl by late 1995. Last week, light sweet crude futures prices were hovering near $18/bbl.
An effect of the low import price in 1994 will be weaker pump prices, with gasoline averaging 2/gal less than in 1993. Diesel prices will increase because of higher taxes and environmental costs.
EIA said U.S. petroleum demand will increase in 1994 due to the combined effects of stronger economic growth, lower oil prices, and recent severe winter weather. It said imports will reach 46.2% of total demand by 1995.
Natural gas demand will grow more quickly in 1994 than in 1993, due largely to healthy growth in the industrial sector.
"The overall strength of natural gas markets through 1995 is expected to carry total gas demand to levels not seen since the early 1970s," EIA said.
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