By Will Horner
China’s demand for oil is growing at a faster-than-expected pace, threatening to tighten crude markets and send oil prices higher as supply struggles to keep up, the International Energy Agency said.
The Paris-based agency’s latest outlook points to a widening divide between booming demand for crude across the developing world and lackluster demand in Europe and North America where economic prospects look bleak.
It also highlights a growing disconnect between oil prices–which have tumbled to their lowest levels in around 16 months in recent weeks–and expectations that strong demand and limited supplies will prompt a sharp deficit that many analysts expect to lift oil prices.
In its closely watched monthly oil market report, the IEA raised its forecast for global oil demand growth this year by 200,000 barrels a day, to 2.2 million barrels a day. It said total demand would stand at 102 million barrels a day, 100,000 barrels a day more than it forecast last month.
China’s share of that increase, already expected to be large, appeared to be growing and “continues to surpass expectations”, the IEA said. The nation’s crude demand hit a record of 16 million barrels a day in March while China will account for 60% of all oil demand growth this year, the IEA said.
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This article was originally published by Marketwatch.com. Read the original article here.