*EPF508 04/06/01
World Oil Demand to Grow Through 2002, Energy Agency Says
(Strong demand, tight supply keep prices high) (360)

Washington -- World oil demand is expected to continue to grow throughout 2002 despite concerns about economic slowdowns in industrialized nations, according to the U.S. Energy Information Administration (EIA).

Demand for oil will be strongest in nations belonging to the Organization for Economic Cooperation and Development (OECD) and in non-OECD Asia, according to the Short-Term Energy Outlook released by EIA April 6. EIA is a statistical agency of the Department of Energy.

Strong world demand and generally tight supply will keep gasoline prices high in the United States. Prices will average $1.49 per gallon throughout the summer 2001 driving season, just slightly lower than last summer's average of $1.53 per gallon. One gallon equals 3.8 liters.

Barring a sharp drop in world consumption, world crude oil prices are expected to remain high, the EIA said. World crude oil is expected to average $25 per barrel in 2001 and $26 per barrel in 2002, compared to $17 per barrel in 1999.

In contrast to the slowdown in 2000, world oil demand is expected to rise at a faster rate during the next 18 months. "People react to changes in prices, not necessarily to levels of prices," EIA Division Director Mark Rodekohr said at a press conference.

Rodekohr said world oil production is expected to begin to increase in the third quarter of this year. He noted that the Organization of Petroleum Exporting Countries (OPEC), which cut crude oil production twice during the first quarter of 2001, recently announced it will reassess its production targets as early as June. "It does appear OPEC has gotten some discipline ... and we think this discipline will continue," Rodekohr added.

U.S. crude oil production is expected to remain flat in 2001 and 2002.

Regarding the short-term electricity supply outlook in the United States, the EIA projects most regions of the country will meet demand, unless hit with an extremely hot summer.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Website: http://usinfo.state.gov)
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