A report that world oil use may gain by 1.73 million bpd to 83.78 million barrels this year, could trigger a rise in oil prices. As 2004 showed record growth in demand, market concerns abound that global demand will increase faster than supply as the trend in all likelihood will continue through 2005. Crude oil for March delivery rose to US$47.54 a barrel on the New York Mercantile Exchange.
OPEC, which pumps more than a third of the world's oil, failed to anticipate the increase in fuel consumption and lowered production targets in March. Will quotas be changed in the scheduled OPEC meet in Iran on March 16? Or will this lead to a situation similar to the one in October 2004, when oil surged to a record US$55.67 in New York because of strong demand and the threat of disruptions to global oil supplies from unrest in Iraq, Saudi Arabia and Nigeria and government actions against OAO Yukos Oil Co., Russia's biggest oil exporter.
Few analysts expect prices to fall as the robust economies of 2004 start faltering in some oil consuming countries. This will keep demand from rising as much as forecast. A global economic recovery is ``marking time'' as faster expansion in the U.S. and the U.K. is overshadowed by weakness in Germany and Japan. German GDP data this week showed negative growth in Q4. Japan has been in a mild recession for 3 consecutive quarters.