The rapid ramp up in oil prices has had an effect on global demand levels, reports the International Energy Agency (IEA).
High prices combined with lowered growth prospects for the developed world has spurred the IEA to cut its global oil demand forecast.
Although March data may be skewed as a result of holiday timing, weather trends and the earthquake and resulting nuclear disaster in Japan, the IEA nevertheless says “$4/gallon gasoline is likely to yield an anemic US driving season. This is the main change to our demand forecast – a weaker 2011 profile in North America” as “high oil prices may have finally begun to dent demand.”
Based on these predictions, the IEA is expecting 89.2 million barrels per day (mbpd) in global demand; a growth rate of +1.5% compared with a growth rate +3.3% in 2010.
IEA analysis of the supply side notes a 1.3 million barrel per day decrease in OPEC oil production since the beginning of the Libyan crisis in February. The IEA does not expect Libyan oil production to come online at all during the 2011 year.