A world demand surge that has driven oil prices to record highs this year will moderate a little in 2005 as higher costs take their toll and China's economic expansion eases, a Reuters survey found.
Oil demand is likely to climb by 1.8 million barrels per day (bpd) next year to 84 million bpd, a modest slowdown from around 2.7 million bpd growth this year, according to a survey of 14 analysts.
The forecast growth is 350,000 bpd higher than a prediction of 1.45 million bpd by the International Energy Agency, which advises 26 industrialised nations on energy policy.
"We remain sceptical on the IEA numbers. Overall demand growth is still fairly good," said Kona Haque of the Economist Intelligence Unit.
Oil markets have been caught out this year by an unexpected surge in China's consumption, which has driven the fastest demand growth in 24 years and pushed up oil more than 65 percent. US crude briefly topped $55 a barrel on Monday.
Chinese demand growth will ease in 2005 as conservation measures kick in and new non-oil power generating facilities come onstream, the survey forecast.
"It will go back to more normal growth rates. There is no way this extraordinary growth rate could be continued," said Steve Turner at Commerzbank.
"High oil prices should begin to bite and the Chinese economy will begin to slow," said Richard Mueller of Energy Security Analysis.
Chinese consumption growth has already slowed in August to an annual six percent from 25 percent of the second quarter, the International Energy Agency said last week.
"Improved power generation in China, as hydroelectric and coal-fired generation is rising, will bring its incremental heavy fuel oil demand down," said Leo Drollas at the Centre for Global Energy Studies.
Even so, China is still expected to account for around a quarter of world consumption growth next year, according to Opec's monthly oil market report on Monday.
"There's still (Chinese) strength on the consumer side - exponential car sales and people are flying more - and what's really driving it are problems in the power sector, which are not going to be solved by next year," said Seth Kleinman of PFC Energy.
Global demand for transport would keep oil growth healthy despite higher prices for consumers, most analysts said.
"Gasoline, jet fuel and diesel demand are all growing strongly. I don't think there will be a big slowdown in demand for transport fuels, unless there is a sharp economic downturn," said Jeff Currie, of Goldman Sachs.
This will leave greater world dependence on oil from Opec cartel producers, as the robust demand outpaces non-Opec output. Most analysts upped their production call on Opec for 2005, by an average of 500,000 barrels to 29.4 million bpd.
"It's going to be a good year for Opec. There's going to remain very little in the way of spare capacity," said Kleinman.