IEA says Energy Demand to Rise as Global Economy Recovers

The International Energy Agency (IEA) has raised its estimates for oil demand next year but says soaring shale production in America should ensure there are no shortages in supply.

Improving economic conditions in China and the US is likely to result in about 865,000 barrels of extra crude demand during 2013, to reach total consumption to 90.5m barrels a day, according to the IEA’s latest oil report.

That figure is more than 110,000 barrels more than estimated just four weeks ago even though the IEA believes demand will remain sluggish in the first half of the year.

The expected increase in overall demand, plus increasing speculation that America is about to unleash a new round of quantitative easing to further boost the domestic economy, helped to raise Brent crude futures to $109 a barrel.

Meanwhile, a meeting of Organisation of Petroleum Exporting Countries (Opec) ministers in Vienna agreed to hold its official output at 30m barrels a day. But there is unease inside Opec that relatively low-demand growth, accompanied by major increases in American and Iraqi oil production, could lead to a price collapse next year.

via Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza