Global oil demand rising as Iran ups output
World demand for oil will increase by 1.4 million barrels a day this year, the International Energy Agency has said.
The rise is 300,000 barrels a day faster than it previously forecast, said the agency, predicting total daily demand to average 94 million bpd.
Global demand in 2014 was about 92.6 million barrels a day, the IEA said.
According to the agency, the rise was driven by consumer demand for gasoline in the US and China. IEA cited “slowing but still relatively buoyant car sales data” in China along with “resurgent sales” of gas-guzzling sport-utility vehicles.
The agency said the global oil market is still facing a glut of oil supplies, with Saudi Arabia producing near record levels and US crude extraction of shale oil growing.
On Thursday, a Saudi official was quoted as saying that the kingdom was ready to increase its oil output in the coming months to a new record despite excess supply.
Saudi Arabia has raised production to around record 10.3 million barrels per day to fund its continued military invasion of Yemen which is eating on the kingdom’s cash reserves.
Riyadh's need for more petrodollars has been exposed by its decision to ramp up exports during the summer when it traditionally lowers them for domestic use in air-conditioners amid the country’s scorching heat.
IEA’s report is good news for Iran which seeks to raise output to levels before sanctions and regain its market share. Tehran has been calling on OPEC members to make room for its oil when it increases production.
According to Minister of Petroleum Bijan Zangeneh, Iran plans to raise output by 500,000 bpd within two months and 1 million bpd within six to seven months after sanctions are lifted on the country.
“I wrote a letter to OPEC member countries. It is our right to return to the market,” he said last week.
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