2004 was an unusual year for oil prices, wherein
prices spiked, after a possible gap of 20 years.
The last oil price surged seen was in 1984.
The world's overall energy consumption grew
by more than 4% in 2004. In volume terms, this
is the largest-ever annual increase in global
primary energy consumption and is the highest
percentage growth since 1984. It is exceptional
that this demand growth was so geographically
widespread. This rapid growth in oil demand
emanated from all forms of energy. Geographically,
demand from China in particular was exceptional.
While China's economy grew over 9% in 2004,
it was outstripped by the rise in Chinese energy
demand - up 15% over last year. Over the past
three years, Chinese energy demand has risen
by 65%, accounting for over half the increase
in global demand over the period. China now
consumes 13.6 % of the world's total energy.
Outside China , world energy demand rose by
almost 3%, the fastest percentage increase since
1996 and approximately twice the rate of the
previous two years. While every region experienced
above-trend growth, demand from non-OECD countries
(excluding China ) grew by almost 5%, roughly
three times as fast as from the OECD countries.
Outside China, India was the single largest
source of non-OECD energy growth, with demand
rising by 7.2 %
Oil consumption in 2004 went up by 3.5%, or
2.5 million bpd - showed the fastest rate of
growth since 1978. Rising Chinese demand accounted
for over a third of this increase with a jump
of 116 % or almost 900,000 bpd. The high demand
came despite record oil prices, which averaged
US$38.27 a barrel over the year - up almost
33% from 2003 and the highest money-of-the-day
average ever. The price of one barrel touched
US$50 in October.
Oil output rose to meet demand, exceeding 80
million bpd for the first time in 2004. Outside
OPEC, production increased by 965,000 bpd in
2004, well above the 10-year average. Russian
production once again rose fastest, with output
up nearly 750,000 bpd. Angola , Chad , Ecuador
, Equatorial Guinea and Kazakhstan all registered
growth of more than 100,000 bpd. The largest
declines were in the UK, down by 230,000 bpd,
and the USA , down by 160,000 bpd. OPEC production
also rose rapidly, by almost 8% to 32.9 million
bpd, the highest level ever. This was the largest
increase in OPEC production since 1986. The
rise was led by Iraq - where production grew
by 677,000 bpd to 2 million bpd, Saudi Arabia
and Venezuela.
World gas consumption grew by 3.5% in 2004,
above the 10-year average of 2.5%. Despite rapid
economic growth, gas consumption in North America
was flat, reflecting the impact of high prices
and also mild weather. Outside North America,
gas consumption rose by 4.5%. Gas production
rose in every region except North America. In
Europe, growth in the Netherlands, Russia and
Norway more than offset the UK production decline.
Pipeline shipments rose by more than 10%. Shipments
of liquefied natural gas (LNG) rose by 5.5%
last year, although below the 2003 growth rate.
US LNG imports continued to rise rapidly, up
by almost 30% compared to Japanese imports that
declined by 3.5% as nuclear plants returned
to operation following shutdowns in 2003.
Gas prices also rose. The average US gas price
increased to US$5.85 mmbtu. Although this was
also a record money-of-the-day annual average,
the 3.9% rise over 2003 was far less marked
than the rise in the oil price. Gas prices in
other regions grew more rapidly. Global coal
consumption rose 6.5%, with 75% of the rise
coming from China.
Coal was the fastest growing fuel globally,
but was the slowest excluding Chinese demand.
Apart from China almost all other demand growth
came from Asia Pacific. Coal prices grew the
fastest of all traded fossil fuels in 2004,
with the European price rising 70% over the
year, driven by declines in Chinese coal exports
as domestic demand increased, shortages in high-grade
coal and increases in transport costs.