Asian oil demand growth reviewed

Asian oil demand growth reviewed

SINGAPORE (Reuters): Slower economic growth, weaker regional
currencies and high oil prices will cap incremental petroleum
demand in Asia this year, according to a Reuters poll.

The survey of nine analysts predicted Asia-Pacific oil demand
will rise by 460,000 barrels a day (bpd) this year to an average
20.89 million bpd.

The poll marks a sharp revision lower from a similar survey in
December when analysts forecast demand at 21.43 million bpd, up
730,000 bpd from 2000.

Last year's high oil prices saw demand growth limited to
430,000 bpd following an increment of 830,000 bpd in 1999,
according to the Paris-based International Energy Agency.

Asia-Pacific still will remain the fastest growing region for
oil consumption in 2001, with China continuing to lead the way.
But the region's share of an overall global increase will be
sharply down from previous years.

With oil prices expected to remain resilient near $25 a barrel
for North Sea benchmark Brent -- less than $4 below the 2000
average at $28.73 -- analysts said the real crunch to demand in
import-dependent Asia-Pacific may come next year.

"Gross domestic product rates were high last year and people
were generally able to absorb higher energy costs, but GDP has
slowed down and people who weathered the price spike in 2000
might not be able to hold on for another year," said David
Johnson at Chase Jardine Fleming in Hong Kong.

"If OPEC sticks to its production cuts this year, oil could go
up sharply in the second half. That's the biggest risk to demand
and will filter through next year," Johnson said.

Asia-Pacific groups the Indian subcontinent, Southeast Asia,
Japan, South Korea, Hong Kong, China, Taiwan, Australia and New
Zealand.

Energy-intensive economies such as South Korea, Japan and
Taiwan are virtually 100 percent reliant on crude and gas imports
to meet energy requirements, while India buys in almost 70
percent of its oil needs.

China still is expected to show a healthy growth rate for oil
demand, albeit at lower levels than last year when hefty
stockbuilding led to an unusually high surge in crude imports.

Most analysts said China would account for up to 75 percent of
Asia's incremental oil growth this year, although the IEA reckons
China will make up just under half the regional increase.

In its monthly oil market report for April, the IEA pegged
annual Chinese demand rising by 220,000 bpd in 2001, 46 percent
of the projected Asia-Pacific increase of 480,000 bpd.