Will oil prices surge once again in 2005?

23-Feb-05
Crude oil prices have nearly doubled in two years as the strong growth in consumption is not easy for the suppliers to keep up with In 2004, crude oil hit all time highs, rising to record high levels. Robust global oil demand in 2005 is forecast to continue, accompanied by rising oil and energy demand. OPEC lifted its output to a 25-year high last year in a bid to put as much oil on the market as possible and meet a surge in demand that few had anticipated. Consumption this year is expected to grow 1.7% , about half of last year's 3.3% growth. Demand this year is expected to reach 83.9 million bpd, up 1.4 million barrels from 2004. But the world still lacks sufficient production and refining capacity. If global demand does not slow, will oil prices once again hit all time highs? Last year, Chinese demand grew by 850,000 barrels a day, and was the largest contributor to the surge in the world's consumption. The Chinese economy is strong and growing, an unexpected spike in demand from China or sudden cuts in global supplies could send the price soaring again while production, pipelines and refineries remain very tight.
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