Oil Demand Crude oil demand is expected to grow at higher rates than supply over the next two years, an oil and gas analyst said Tuesday.
"So we contend that crude oil prices will stay relatively high. ... We would estimate that a range of US$95 to $105 [for West Texas Intermediate crude oil] is probably an appropriate outlook for 2012," said Adam Twa, a principal at Peters & Co. Limited.
Increasing consumption in some emerging nations will continue to drive growth in crude oil demand as consumption remains relatively flat in developed countries, Twa told an Investment Industry Association of Canada (IIAC) / Financial Post investment outlook lunch in Calgary.
The United States consumes about 23 bbls of crude oil per person per year while countries such as India and China consume only at roughly one-tenth of that rate -- but the gap is narrowing as more people in emerging economies can afford cars, he said.
"That will continue to drive crude oil demand," Twa predicted.
On the supply side, it's no surprise that the biggest growth in the near term will be out of Libya, which was producing about 1.7 million bbls a day before a revolution and civil war reduced output to just a trickle. But now "they're firmly ramping that up," said Twa.
But the next source of supply growth isn't one many people would have predicted a few years ago.
"The second-largest growth area actually in the world is in the United States. ... The North Dakota Bakken play is one of the most active in North America," the Peters analyst said.
North Dakota oil production has been setting records -- for example, hitting a high of 510,000 bbls a day in November (see today's DOB for a story on North Dakota production).