Crude oil prices are likely to rise gradually to $18 a barrel by late 1995 from the recent price of $16 a barrel because of continuing growth in demand world-wide, particularly in Asia, according to projections by the US Energy Information Administration (EIA). Average daily demand worldwide is estimated to be more than 900,000 barrels a day higher in 1994 than in 1993, a rise of about 1.4 per cent, and is expected to increase by about the same amount in 1995, EIA said in releasing its projections November 16. Total worldwide average daily output in 1994 was 67,550,000 barrels.
Most of the demand growth in 1995 is expected in Asia. "This is market that is driving a lot of this growth," Jay Hakes, EIA administrator, said at a briefing for journalists. Average daily demand in all developing countries in 1995 is expected to be 850,000 barrels above the average 1994 level, with China alone accounting for 48 per cent of this growth, Hakes said. Growth in demand in Asia is estimated at 5 per cent in 1994 and 6 per cent in 1995, and at 2 per cent in 1994 and 4 per cent in 1995 for Latin America, Africa and the Middle East.
Demand in the 25 countries of the Organization for Economic Cooperation and Development (OECD), composed mostly of industrial countries, is estimated to be 600,000 barrels a day higher in 1994 than in 1993, and projected to be 340,000 barrels a day higher in 1995 than in 1994.
The large increase in 1994 was due to a severe winter in the United States and somewhat better economic conditions in Japan. The increases in the developing world and industrialized countries are partially offset by a continuing estimated decline in demand in Russia and the other countries of the former Soviet Union. Demand began decreasing in the late 1980s and accelerated about 1991 as the Soviet Union began splintering. …