Asia oil demand growth to accelerate in 2001: Poll
Asia oil demand growth to accelerate in 2001: Poll
SINGAPORE (Reuters): Asian oil demand growth should accelerate next year after being stunted in 2000 by high oil prices, analysts said.
Decade-high crude values took some of the shine off Asia's appetite for oil this year and a slowdown in the U.S. economy in 2001 held risks for Asian markets, highly dependent on North America for exports.
"Next year is about weighing up the effect of lower oil prices and induced higher demand against the depressive effect of a general economic slowdown," said Vipin Ahuja, regional analyst at Dresdner Kleinwort Benson in Singapore.
A Reuters poll of nine analysts predicted Asian oil demand in 2001 at 21.43 million barrels per day (bpd), up 760,000 bpd or 3.7 percent on the mean of 20.67 million bpd for this year.
Historical data from the Paris-based International Energy Agency records growth of just 520,000 bpd in 2000.
Forecasts for the year-on-year increment in 2001 fell in a wide range between 550,000 bpd and 960,000 bpd.
Even with the downside risks, growth in demand will stay way ahead of other regions and on a global basis will account for roughly half of total growth.
Asia accounts for about a 27 percent share of overall world demand that is seen expanding to about 77 million bpd nex year.
Asia groups Southeast Asia, Japan, Korea, Hong Kong, China, Taiwan, the Indian subcontinent and the Pacific.
Soaring oil prices this year -- North Atlantic benchmark Brent crude has average $28.60 a barrel so far against a 10-year average of $19.25 -- led to some downgrading of 2000 oil demand forecasts.
"Don't overestimate the effect of high oil prices on Asian consumption," said Masaatsu Koyama at Cambridge Energy Research Associates (CERA).
He said Japanese energy demand had been insulated from high crude costs by the yen's stronger performance against the dollar.
India, Thailand, South Korea and the Philippines, however, had seen some constraint on consumption of refined oil products because of burgeoning energy costs.
Average forecasts have been downgraded by 120,000 bpd for this year and next since a similar Reuters survey in July which projected Asian demand at 20.79 million bpd in 2000 and 21.55 million bpd next year.
Deborah White at the Paris-based International Energy Agency (IEA) predicted Asian oil demand next year rising 4.4 percent, or 920,000 bpd, after an increase of 520,000 bpd in 2000. In 1999, the IEA pegged Asian demand growth at 800,000 bpd.
She saw world demand rising 1.94 million bpd, with Asia taking 47 percent of incremental growth.
"Growth next year of 4.4 percent is not sustainable, so I'm saying this is a bit of a bounce," White said.
"This year there has been some slowdown, which is partly price related. But India has been weak because of drought and flooding which has depressed diesel demand," she said.
China, the world's third largest energy market behind the United States and Japan, would post demand growth next year of 290,000 bpd, while Japan would increase by a slim 100,000 bpd.
"The state of Japan's economy is a big question mark," said White.
Deutsche Bank in New York forecast China's demand rising five percent, or 240,000 bpd, to 5.02 million bpd from this year's 4.78 million bpd.
"China's been a magnet for crude this year although it's been hard to get a feel for actual product consumption," said Deutsche Bank's Jay Saunders.
But after a bumper year of crude imports and record refinery thoughput rates -- now averaging more than 80 percent -- some analysts are wondering if China can maintain such a pace.
Peter Best at Credit Suisse First Boston in Hong Kong said heavy building of Chinese refined products' inventories this year was unlikely to repeated in 2001.
"Very high refinery utilization will have to slow down and that means oil intake will also have to slow," Best said.