According to BP, rapid growth in demand for all forms of energy dominated world energy markets last year, leading to rising prices. While growth in demand from China in particular was exceptional, BP said the strength of demand growth was a global phenomenon, increasing above the 10-year trend in every region of the world.
“The world’s overall energy consumption grew by 4.3 percent last year. In volume terms, this is the largest ever annual increase in global primary energy consumption and is the highest percentage growth since 1984,” Peter Davies, BP’s chief economist, said last month at the release of the company’s annual world energy report.
According to the published report, oil consumption last year rose by 3.4 percent, roughly 2.5 million barrels per day (bpd), the fastest rate of growth since 1978. Rising Chinese demand accounted for more than a third of this increase, with a jump of 15.8 percent (almost 900,000 bpd).
The BP report said high demand came despite record oil prices, which averaged $38.27 a barrel over the year–up nearly 33 percent from 2003 and the highest money-of-the-day average ever to be reported in the annual report (though in inflation-adjusted terms prices were higher between 1974 and 1985). The price of a barrel touched $50 in October, according to the report.
Oil output rose to meet demand, exceeding 80 million bpd for the first time ever. Outside OPEC, BP said production increased last year by 965,000 bpd, 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 230,000 bpd, and the U.S., down 160,000 bpd.
The report shows that OPEC production also rose rapidly–by almost 8 percent to 32.9 million barrels per day, the highest level ever. This was the largest increase in OPEC production since 1986. BP said the rise was led by Iraq (where production grew by 677,000 bpd to two million bpd), Saudi Arabia and Venezuela.