Global demand for oil will grow by 1.8 percent in 2007 and increase by an average of 2.0 percent annually during the five years to the end of 2011, the International Energy Agency forecast on yesterday.
The IEA said that the current high prices of crude oil were constraining demand but that economic expansion in Asia and rising consumption in the Middle East would outweigh this effect during the period to 2011.
In a sign of the shifting of power in the world economy, the IEA forecast that oil demand from Asia would exceed that of North America by 2011. The IEA forecast that extra supplies of crude oil and refined products such as gasoline would help cool the febrile atmosphere on world markets.
Yesterday, prices were about 74 dollars per barrel on world markets, compared with about 40 dollars per barrel at the start of 2005 and just 20 dollars per barrel at the beginning of 2002.
On the subject of prices for 2007, the IEA was cautious about giving projections, saying that geopolitical factors, the hurricane season and worries about US stocks of gasoline might override considerations of supply and demand.
Although increases in supply relative to demand "should in theory help to ease some price pressures, geopolitical issues will not go away," the IEA said in its monthly oil market report.
"It is difficult to see market nerves being calmed until the summer driving season is out of the way, the hurricane season is over and the anticipated surge in second-half 2006 non-OPEC supplies materialises."