Market estimates that the booming demand from China- a key factor triggering high oil prices in 2004, was going to trail off, have been proved wrong. China's oil demand will grow by 33% more than previously forecast this year. Higher than expected oil demand in China has trigegred off yet another oil price hike. Crude futures are hovering around US$55 per barrel.
This report has been released in a market already plagued with supply concerns, a market that is certain that producers are finding it hard to meet the world's 84 million bpd oil demand and to maintain a supply cushion in case of an unexpected disruption.Organization of Petroleum Exporting Countries has indicated that it plans to maintain its current production output and will not add to the volatile market conditions.