EIA To Trim China Oil Demand Forecast,But Remains Bullish
14:44 EST Monday, Jun 06, 2005
NEW YORK -(Dow Jones)- The federal Energy Information Administration is set to lower its 2005 estimate of Chinese oil demand in its latest Short-Term Energy Outlook, due out Tuesday, EIA analysts said Monday.
The analysts declined to provide specific figures ahead of the report's official release, but said recent data have led them to conclude that Chinese oil demand last year grew slightly less than they had believed and that this year's rate of growth won't be as high as the 800,000 barrels a day currently forecast.
A downward revision would take the edge off one of the more bullish forecasts for demand by the world's second-largest oil consumer. Strong growth in China has helped push overall world oil demand up to a level producers are stretched to cover, underpinning the long rally in oil prices.
The change, however, isn't expected to be profound, and the EIA, the statistics arm of the U.S. Department of Energy, will remain at the upper end of forecasts for Chinese demand.
"Most likely, we'll show a slight downward revision, but it won't be much," said EIA analyst Erik Kreil. "It won't be down to 600,000 barrels a day" for 2005.
In its forecast last month, the EIA said Chinese oil demand will rise in 2005 to 7.4 million barrels a day, up from 6.6 million barrels a day last year, accounting for more than a third of total world demand growth this year.
While most analysts consider that rate too high, EIA analysts say they remain bullish on China, where a booming, industrial economy consumed record amounts of oil last year.
The EIA views efforts by the Chinese government to rein in what some see as an overheating economy as largely unsuccessful, allowing oil demand to grow at a rapid pace, although not as strongly as last year.
Barring a major economic downturn in China, Chinese oil demand will grow by at least 500,000 to 600,000 barrels a day this year and next year, Kreil said. |
