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July 11, 2005: Report Finds Record Demand For Energy In 2004

July 11, 2005
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LONDON - Rapid growth in world demand for all types of energy led to higher energy prices in 2004, according to a report issued by BP. While growth in demand from China in particular was exceptional, the strength of demand growth occurred globally, increasing above the 10-year trend in every region of the world.

"The world's overall energy consumption grew by 4.3 percent 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," said Peter Davies, BP's chief economist, as he introduced the BP Statistical Review of World Energy 2005.

Published annually by BP, the Review contains data on production and consumption of energy worldwide.

While China's economy grew 9.5 percent in 2004, this was outstripped by the rise in Chinese energy demand - up 15.1 percent over the year. Over the past three years, Chinese energy demand has risen by 65 percent, accounting for over half the increase in global demand over the period. China now consumes 13.6 percent of the world's total energy.

Outside China, world energy demand rose by 2.8 percent, the fastest percentage increase since 1996 and approximately twice the rate of the previous two years.

Oil consumption in 2004 - up 3.4 percent or 2.5 million barrels a day - showed the fastest rate of growth since 1978. Rising Chinese demand accounted for over a third of this increase with a jump of 15.8 percent or almost 900,000 barrels a day.

The high demand came despite record oil prices, which averaged $38.27 a barrel over the year - up almost 33 percent from 2003 and the highest average ever to be reported in the Review (though in inflation-adjusted terms prices were higher between 1974 and 1985). The price of a barrel touched $50 in October.

World natural gas consumption grew by 3.3 percent in 2004, above the 10-year average of 2.6 percent. Despite rapid economic growth, natural gas consumption in North America was flat, reflecting the impact of high prices and also mild weather. Outside North America, natural gas consumption rose by 4.3 per cent.

Natural gas prices also rose. The average Henry Hub U.S. natural gas price increased to $5.85 per MMBtu. Although this was also a record annual average, the 3.9 percent rise over 2003 was less marked than the rise in oil prices.

Publication date: 07/11/2005

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