Though characterized by recovery, the global oil and natural gas markets have gone their separate ways in recent months, chief of the International Energy Agency (IEA) said Thursday.
The oil markets had seen a surge in demand in emerging markets, IEA Executive Director Nobuo Tanaka told the opening of the 2011 St. Petersburg International Economic Forum.
"Oil markets have seen a surge in demand growth in emerging markets, outstripping growth in supply, pushing prices higher even before the conflict in Libya tightens supplies further," said the IEA chief.
"In both oil and gas we see a notable dichotomy between non-OECD and OECD (Organization for Economic Cooperation and Development) markets with demand driven by China, India and the Middle East," he added.
But for natural gas markets, however, gas production had remained where it would if the global financial crisis had never happened.
"In fact, gas production is at exactly the level it would have been if the financial crisis had never happened," commented Laszlo Varro, vice president for strategy development of the MOL Plc. under the International Energy Agency.
Thursday's presentation in St. Petersburg on medium-term oil and natural gas markets was expected to provide a comprehensive outlook of the oil and gas fundamentals up through 2016.
IEA executives and analysts offered their insights and information for developments in market demand for oil on a product-by-product and key-sector basis. Also touched upon was a bottom-up assessment of upstream and refinery investments, trade flows, oil products supply and spare capacity of the Organization of Petroleum Exporting Countries.
As regards natural gas, the presentation analyzed the market demand for gas on a region-by-region basis, production and infrastructure investment, price development and prospects for unconventional gas and globalization of LNG trade.
"High prices and strong economic and oil demand growth can co-exist for a while because of the inelasticity of oil prices in the short term," said David Fyfe, head of the oil industry and market division of the IEA.
"Economic risks, however, remain skewed to the downside the longer oil is at 100 dollars plus. And that should also ultimately spur greater efficiency gains with the oil economy going forward."
Fyfe added that natural gas liquids are becoming an increasingly important part of the supply mix.
