Energy agency forecasts increasing demand for oil

| 5/12/2005

The International Energy Agency said on May 10 that oil demand should continue to rise this year beyond previously expected levels.

In its monthly energy forecast, the agency said that demand should rise 2.2 percent this year, up to 84.3 million barrels per day.

While demand in China and the U.S. had eased somewhat since April, the agency reported that demand in other areas – such as the rest of Asia, the former Soviet Union and the Middle East – had increased.

Demand from China grew 4.5 percent in the first quarter of 2004, compared with a 19.5 percent growth in the same time period of 2004.

Meanwhile, prices for light, sweet crude oil fell to a low of $48.55 in trading on the New York Mercantile Exchange on Wednesday. This came on the heels of reports of increased supplies both from the IEA and the U.S.

According to ProMiles, diesel prices on May 12 continued to drop slightly, with the national average coming in at $2.245 per gallon.

However, that is still significantly higher than 2004 and the drop is not expected to last as the summer driving season kicks into high gear and demand continues to rise.

One thing that could help drivers survive the upcoming crunch is the fuel surcharge provision currently making its way through Congress. The provision was approved by the U.S. House as part of its version of the highway bill earlier this year.

The language in the House bill – HR3 at Section 4139 – requires all motor carriers, brokers and freight forwarders running truckload freight to implement fuel surcharges and pass on 100 percent of those charges to the person who actually pays for the fuel.

The Owner-Operator Independent Drivers Association is urging truckers to fax and call – writing may not be fast enough – their U.S. senators and urge them to include the same fuel surcharge language in the final version of the bill.

If truckers are uncertain who their senators are, they can contact OOIDA’s Membership Department, and they will look up the information. The toll-free OOIDA number is 1-800-444-5791.

Truckers can also call the U.S. Capitol switchboard at (202) 224-3121, give the operator their ZIP code and be directly connected to their senator’s office.