Abu Dhabi, oil consumption in the Middle East grew by 3.7 percent in 2006 over the previous year, but crude production in the region increased by only 0.7 per cent, according to British Petroleum (BP).
The reason is the massive economic development occurring in the region in which stated by the Head Of Energy Analysis of BP, Mark Finley. The middle East ranked third in oil consumption growth after China which increased its consumption by 6.6 percent followed by former Soviet Union countries which consumed 4.6 percent more oil.
Oil consumption in the Organization for Economic Cooperation and Development (OECD) countries declined in 2006 by 400’000 barrels per day (bpd), shall be the largest decline since 1983, according to the statistical review by the World Energy. However, consumption of coal was on the rise in the OECD countries in 2006 mainly due to relative relaxation in emissions policies in the European Union (EU), a fact that is most likely to change in 2007.
Global Coal consumption grew by 4.5 percent, while oil consumption grew by a mere 0.4 percent due to the substantial decline in consumption in the OECD counties. During the past 5 years, average oil price doubled while average Natural Gas price grew by 75 percent. Coal recorded the smallest increase of more then 50 percent, attributing the substantial growth in Coal consumption relative to other energy resources to the slower increase in the price of the mineral.
The USA, which wants to reduce its dependence on oil imports by 20 percent within 10 years, experienced a 1.3 percent decline in oil consumption last year. The oil trade has witnessed a tight margin between demand and reserved capacity in 2004 and 2005.
Nevertheless, the surplus production capacity has increased near the historical average last year, in the vicinity of three million barrels per day, accordingly we do not feel that the world will face a resources constraint in the near future. The Middle East encountered for 31.2 percent of global oil production in 2006 and 61.5 percent of global reserves.
Global consumption of Natural Gas recorded an increase of 2.5 percent during the same period, with the Middle East recording a 4.5 increase. With the exception of the Middle East, growth of Natural Gas consumption was less then average, and the continuation of such growth in this region will mainly depend on the supply systems’ development.
However, energy policies may take time to implement and it will take sometime to see if the announced target is to be achieved in reality.
Filed under: OIL & GAS NEWS