2004 was an unusual year for oil prices, wherein prices spiked, after a possible gap of 20 years. The last oil price surged seen was in 1984. The world's overall energy consumption grew by more than 4% in 2004. In volume terms, this is the largest-ever annual increase in global primary energy consumption and is the highest percentage growth since 1984. It is exceptional that this demand growth was so geographically widespread. This rapid growth in oil demand emanated from all forms of energy. Geographically, demand from China in particular was exceptional. While China's economy grew over 9% in 2004, it was outstripped by the rise in Chinese energy demand - up 15% over last year. Over the past three years, Chinese energy demand has risen by 65%, accounting for over half the increase in global demand over the period. China now consumes 13.6 % of the world's total energy.

Outside China , world energy demand rose by almost 3%, the fastest percentage increase since 1996 and approximately twice the rate of the previous two years. While every region experienced above-trend growth, demand from non-OECD countries (excluding China ) grew by almost 5%, roughly three times as fast as from the OECD countries. Outside China, India was the single largest source of non-OECD energy growth, with demand rising by 7.2 %

Oil consumption in 2004 went up by 3.5%, or 2.5 million bpd - showed the fastest rate of growth since 1978. Rising Chinese demand accounted for over a third of this increase with a jump of 116 % or almost 900,000 bpd. The high demand came despite record oil prices, which averaged US$38.27 a barrel over the year - up almost 33% from 2003 and the highest money-of-the-day average ever. The price of one barrel touched US$50 in October.

Oil output rose to meet demand, exceeding 80 million bpd for the first time in 2004. Outside OPEC, production increased by 965,000 bpd in 2004, well above the 10-year average. Russian production once again rose fastest, with output up nearly 750,000 bpd. Angola , Chad , Ecuador , Equatorial Guinea and Kazakhstan all registered growth of more than 100,000 bpd. The largest declines were in the UK, down by 230,000 bpd, and the USA , down by 160,000 bpd. OPEC production also rose rapidly, by almost 8% to 32.9 million bpd, the highest level ever. This was the largest increase in OPEC production since 1986. The rise was led by Iraq - where production grew by 677,000 bpd to 2 million bpd, Saudi Arabia and Venezuela.

World gas consumption grew by 3.5% in 2004, above the 10-year average of 2.5%. Despite rapid economic growth, gas consumption in North America was flat, reflecting the impact of high prices and also mild weather. Outside North America, gas consumption rose by 4.5%. Gas production rose in every region except North America. In Europe, growth in the Netherlands, Russia and Norway more than offset the UK production decline. Pipeline shipments rose by more than 10%. Shipments of liquefied natural gas (LNG) rose by 5.5% last year, although below the 2003 growth rate. US LNG imports continued to rise rapidly, up by almost 30% compared to Japanese imports that declined by 3.5% as nuclear plants returned to operation following shutdowns in 2003.

Gas prices also rose. The average US gas price increased to US$5.85 mmbtu. Although this was also a record money-of-the-day annual average, the 3.9% rise over 2003 was far less marked than the rise in the oil price. Gas prices in other regions grew more rapidly. Global coal consumption rose 6.5%, with 75% of the rise coming from China.
Coal was the fastest growing fuel globally, but was the slowest excluding Chinese demand. Apart from China almost all other demand growth came from Asia Pacific. Coal prices grew the fastest of all traded fossil fuels in 2004, with the European price rising 70% over the year, driven by declines in Chinese coal exports as domestic demand increased, shortages in high-grade coal and increases in transport costs.