December 8, 2010 / 6:22 PM / in 7 years

Oil demand back to pre-recession peaks - WoodMac

LONDON, Dec 8 (Reuters) - World oil demand for 2010 will likely exceed the previous all-time high reached in 2007 and will grow by over 1.5 percent next year due to growing demand in emerging markets, a leading consultancy said.

Wood Mackenzie forecasts world oil demand in 2010 reaching an annual average 86.7 million barrels a day - 100,000 barrels a day higher than in 2007 - and demand is expected to grow further to 88.1 million bpd in 2011 and almost 90 million in 2012.

“The global market for oil is diverging as never before. OECD demand fell by a total 3.9 million bpd over the course of 2008 and 2009. On the other hand emerging market demand increased by 1.6 million bpd,” said Wood Mackenzie’s analyst Francis Osborne.

“This year will see the recovery of all the demand lost during 2008 and 2009, while in 2011 world demand will be two percent above the peak pre-recession level hit in 2007. In 2012 demand will be almost four percent higher than this peak”.

Leading this recovery is China and the rest of Asia with diesel and gasoil demand in China continuing to grow at a rate of around eight percent per year. Gasoil is a refinery product which can be used for heating or diesel production.

In India consumption of diesel and gasoil is currently growing at seven percent per annum and gasoline at 11 percent.

This year the Asian market will be 3 million bpd larger than the North American market - in 2008 it was 1.4 million bpd larger, WoodMac said.

”At the start of this year we had estimated that demand growth in 2010 would be of the order of 2 million bpd, at the top end of industry expectations: it now looks as though it may be closer to 2.5 million bpd with 2010 looking like one of the fastest growing years on record.

“Only twice before in the past 30 years has demand grown as much as this, and in recent years, 2010 will be second only to the surge in 2004,” Osborne said.

Reporting by Dmitry Zhdannikov; editing by Keiron Henderson

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