Increased demand in China is one of the major reasons the International Energy Agency has boosted its oil demand forecast.
The IEA, which is the West’s energy watchdog, predicts increased global consumption of up to 1.3 percent more oil over the next five years. Chinese demand accounts for 41 percent of the rise.
In the short term, the Paris-based adviser to 28 consumer countries raised its assessment of how much OPEC oil would be needed this year by 400,000 barrels per day (bpd) to 30.1 million bpd in its monthly report.
In the five-yearly forecast, the IEA made the assumption Libyan output would not return to pre-war levels until 2014.
“We have lost 1.5 million barrels per day of capacity from Libya, baseline demand is higher and spare capacity has been
eaten into,” David Fyfe, head of the IEA’s Oil Industry and Markets Division, said.
He added: “I think the market from 2010 through 2012 is looking tighter than we were thinking six months ago.”