Asian oil demand rally seen beginning in 1999<\/p>\n
LONDON (Reuters): Battered Asian oil demand will start a slow
\nrecovery next year but could still fall just short of the pre-
\nfinancial crisis levels of 1997, a Reuters survey of analysts
\nfound.<\/p>\n
The poll of eight industry experts found that this year's
\nunprecedented downtrend would give way to mild gains in 1999 and
\n2000 but nothing like the growth of previous years.<\/p>\n
An average of the eight forecast Asian oil demand at 19.65
\nmillion barrels a day (bpd) in 1999 from 19.33 million bpd this
\nyear, reversing most of the 2 percent decline from 19.71 million
\nin 1997.<\/p>\n
Before this year's financial crisis the region, worth about a
\nquarter of world demand, had contributed nearly 50 percent of
\nannual global growth in crude demand.<\/p>\n
Analysts said economies hard hit by plunging currencies will
\nfind the road to recovery a steep upward struggle with demand in
\nNorth Asia which accounts for nearly half of Asia Pacific demand,
\nlikely to contract by about 10 percent this year.<\/p>\n
\"Asia is stuck in a structural economic crisis and the
\nprospect is very worrying with Japan, Asia largest consumer still
\nin recession and China's current restructuring, \" said Gundi
\nRoyle, director of oil and gas research at Deutsche Morgan
\nGrenfell in London.<\/p>\n
\"For the oil market, Asia was the engine that drives world oil
\ndemand up because it constitutes half of world oil growth,\" said
\nIrene King at JP Morgan in New York who also projected a modest
\nupturn next year.<\/p>\n
\"1999 will not be a return to the glory days before the crisis
\nbut things should look slightly better,\" she said.<\/p>\n
Paul Cheng, an analyst at Lehman Brothers in New York saw
\nAsian oil demand hitting a floor in the first quarter of next
\nyear and picking up only in the fourth quarter.<\/p>\n
\"Under normal weather conditions, demand should pick up in the
\nlast quarter of the year. Economic growth for the rest of Asia is
\nlikely to be flat between 1998 and 1999. China and India will
\nprobably grow about five percent in the same period,\" he said.<\/p>\n
\"By the year 2000 or even late 1999, the Asian economy should
\nrebound and we should see stronger growth,\" he added.<\/p>\n
Asia's fall in oil demand has been cushioned this year by
\ncheaper prices, analysts said.<\/p>\n
\"Consumption was not curtailed as much as it would have been
\nas oil has become cheaper at least in the first six months of
\nthis year,\" said John Toalster at Societe Generale in London.<\/p>\n
Asian currencies, excluding China have fallen by an average of
\n34 percent since last July with the Indonesian rupiah leading the
\nlosers, down 77 percent. Thailand's Baht has fallen by almost 34
\npercent followed by the South Korean won which has dumped
\n39.percent.<\/p>\n
Asian GDP without China has contracted by an average of 3.75
\npercent with Malaysia, Indonesia, South Korea, Philippines,
\nThailand, Hong Kong and Japan registering negative growth,
\naccording to a recent Reuters market survey.<\/p>\n
But Asian refiners lost purchasing power on the dollar-
\ndenominated oil market has partly been compensated for by the
\nslide in world oil prices.<\/p>\n
Benchmark Brent blend crude has averaged less than US$14 a
\nbarrel so far this year compared to $19.30 in 1997.<\/p>",
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