Oil (NYSE:USO) made a reversal today, with prices rising after OPEC and the Energy Information Administration maintained projections for record oil consumption in 2011 despite the poor global economic climate. While gasoline consumption in the U.S. and Europe has been weak, demand in China and other developing nations is continually increasing.
While OPEC expects global demand in 2011 to be at its highest level ever, they did adjust their figures from earlier estimates of a 1.38 million barrel increase in daily consumption down to a 1.36 million barrel increase. Those estimates put the daily world consumption of oil in 2011 at 88.18 million barrels, 47% more oil (NYSE:OIL) than the amount the IEA announced last month that it would release in reserves.
Part of the reason for OPEC’s adjusted estimates is the unpredictable nature of U.S. consumption. Americans tend to adjust their consumption habits by curbing travel plans and using alternative forms of transportation when gas prices are too high, and gas prices are currently 92.1 cents higher than they were at the same time last year.
The U.S. Energy Information Administration’s estimates are in line with those of OPEC, predicting a 1.6% increase in global demand to a record 88.16 million barrels per day. According to the EIA, that number exceeds global oil production, which will force countries to release reserve supplies this year and likely in years to come unless the world makes great strides toward becoming more fuel-efficient and implementing alternative energy programs to curb oil consumption.