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LONDON -- Rapid global economic expansion is fueling the biggest increase in world oil demand growth for 16 years, the International Energy Agency (IEA) said on Wednesday, reported Reuters.
In its monthly Oil Market Report, the Paris-based agency raised its forecast for incremental oil demand in 2004 by 270,000 barrels per day (bpd) to 1.95 million bpd on the 80.6 million bpd world market.
Stronger-than-expected energy consumption among industrialized nations is bolstering explosive demand growth in China. The agency, an adviser on energy to 26 industrialized nations, said its world growth forecast represents the largest absolute increase in global oil demand since 1988.
"Such steep growth is not incommensurate with a surge in the global economic recovery," said the report. "But this welcome resurgence in economic activity brings to the fore the issue of securing the necessary supplies to sustain the recovery."
The report comes with U.S. oil prices setting a 13-year high of $40.38 per barrel on Wednesday, despite proposals from leading OPEC producers for higher output limits.
The price spike has come during the second quarter, when world oil demand is at its lowest seasonal ebb, raising concerns about prices later in the year, as demand rises again.
The IEA is forecasting world oil consumption will rise 3.8 million bpd from the second quarter's 78.7 million bpd to 82.5 million in the fourth quarter.