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March 03, 2011

IEA World Oil supply report for Feb 2011 and China Oil Demand


The IEA oil market report from Feb 10, 2011

World oil supply rose 0.5 mb/d in January, to 88.5 mb/d, on higher OPEC crude and NGL output. Non‐OPEC supply was unchanged from December at 53 mb/d, as outages continued to constrain production. 2010 estimates remain at 52.8 mb/d, while the 2011 outlook is nudged up 0.1 mb/d to 53.5 mb/d on higher North American output.



Global oil product demand for 2010 and 2011 is revised up by 120 kb/d on average on higher‐than‐expected submissions in non‐OECD Asia and improved economic prospects for OECD North America. At 87.8 mb/d in 2010, global oil demand rose by 2.8 mb/d year‐on‐year, and should reach 89.3 mb/d in 2011 (+1.5 mb/d year‐on‐year).
China oil demand grew 12% in 2010 and is projected to grow 6% in 2011.

Business Week June 2010 - While Chinese oil demand is expected to reach 11.63 million barrels a day by 2015, from 9.16 million barrels a day in 2010, the pace of annual growth is slowing, according to the IEA data. Consumption will increase 4.1 percent in 2015, compared with 7.6 percent in 2010 [actually 2010 appeared to have 12% growth from more recent data].

I am projecting China to grow by 65% in local currency by 2015. The IEA is projecting a 24% growth in oil demand. I expect China's economy to more than double by 2015 in US dollar terms because of changes in the exchange rate.

Projected GDP for China and USA by NBF:

Year GDP(yuan) GDP growth USD/CNY China GDP China+HK US GDP  US Growth 

2010N 39.5         10.5    6.59       6.1      6.3   14.6   2    
2011 44             9.6    6.2        7.2       7.4   14.9   3.5
2012 49             8.5    5.9        8.5       8.7   15.2   4.2
2013 55             8.5    5.6        9.8      10.1   15.5   4.2
2014 60             8.5    5.3       11.4      11.7   15.7   2.7
2015 66             8.5    5.0       13.2      13.5   16     2.7
2016 73             8      4.8       15.3      15.6   16.4   2.7 
2017 80             8      4.6       17.6      17.9   16.8   2.7 Past USA
2018 87             8      4.3       20        20     17.2   3
2019 95             8      4.1       23        23     17.6   3
2020 104            7.5    3.9       27        27     18.1   3
2021 113            7.5    3.7       30        31     18.7   3
2022 122            7.5    3.5       35        35     19.2   3
2023 133            7      3.4       40        40     19.8   3
2024 143            7      3.2       45        45     20.4   3
2025 154            7      3.0       51        51     21.0   3
2026 166            7      3         55        56     21.6   3
2027 178            7      3         59        60     22.3   3
2028 192            7      3         64        64     23.0   3
2029 206            7      3         69        69     23.6   3 
2030 222            7      3         74        74     24.4   3

There is an adjustment for the inflation differential of 5% which falls to 3% per year.

There will be a business and economic data coming from the 2010 chinese census. This will be reported in mid-2011. I would expect about 3-10% adjustment/restatement of GDP to come from the new data. I expect the adjustment will shift official estimates higher.


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