NEW YORK, June 27, 2001 à‚– Energy markets were put to the test in 2000 with crude oil prices reaching levels not seen since the early 1980s as supplies remained tight for most of the year. Natural gas prices lagged oil prices but followed upwards, reflecting the impact of contractual links and competition between fuels, according to The BP Statistical Review of World Energy 2001, published today.
The Review also tracks the response of markets. Oil demand growth was weak in 2000 as high prices encouraged conservation and substitution into alternative fuels: coal consumption increased for the first time since 1996. This demand growth weakness appears to have carried into 2001. With oil production from both OPEC and Non-OPEC growing strongly, global oil production capacity appears to be growing faster than demand.
For the first time in its fifty-year history, a companion edition to the Statistical Review has been published to focus on energy markets and production in the US. The Statistical Review of US Energy provides data on a period when energy markets were characterised by high prices, low inventories, increased capacity utilisation, and increased dependence on net energy imports. Energy consumption growth in 2000, at 2.3%, was somewhat above the ten year average of 1.8%, but well above the rate of growth in production, at 0.5%.
The global edition of the Review highlights marked regional differences in both demand and supply. World primary energy consumption grew by a relatively strong 2.1% in 2000, following two years of virtually no growth in 1998 and 1999. Natural gas retained its position as the fastest growing fossil fuel. Energy consumption rose by 2.7% in North America (thanks in part to colder winter weather) but more slowly in the European Union and Japan, where consumption rose by a modest 1.1%. The emerging economies of Asia (excluding China) saw consumption continuing to bounce back from 1998 lows: consumption grew by 5.1% in 2000. The picture in China was very different: total energy consumption fell for the fourth consecutive year as a decline in coal use of more than 6% was only partially offset by increased oil and gas consumption.
Oil prices rose dramatically, averaging 58% higher than in 1999 at $28.98 per barrel for Brent crude oil — the highest price since 1983. OPEC production rose by 5.6% compared to 1999 as the organisation reversed the quota cuts of that year. Increases in production in Saudi Arabia, Iran and Kuwait took the Middle East’s share of global production to 31%. Non-OPEC supply recovered after falling in 1999, rising by 2.1% as investment and production began to respond to higher prices. Oil consumption growth was relatively weak, growing by only 1%, as consumers reacted to high prices.
Gas was the fastest growing fuel in 2000, with global consumption rising by 4.8% — the highest rate since 1996. Gas demand increased in all regions but grew especially fast in Asia-Pacific, where it increased by almost 8%. Chinese consumption was exceptionally strong, rising by 16%. The US and Canada also outstripped the global average, with a 5.1% rise. In the Former Soviet Union, gas consumption increased for the second year running, rising by 2.9% and reversing a trend of near continuous decline since the early 1990s.
Globally, natural gas production increased by 4.1%. The biggest increases occurred in countries tapping into the even faster growing international trade in natural gas: output grew by more than 50% in Nigeria and Oman as new LNG projects began building towards capacity. Production in Turkmenistan more than doubled as Russia pulled in additional Turkmen gas to compensate for declining domestic production.
Global coal consumption increased for the first time since 1996 as coal prices lagged well behind rapidly increasing oil and natural gas prices. A fourth consecutive annual fall in Chinese demand was more than offset by vigorous growth in the rest of Asia, Europe and the USA. Nuclear power generation increased in all regions, averaging 2.7% at the global level, in line with the ten-year average. Hydroelectric generation increased by 1.7% as a 14.1% decline in US generation was counteracted by strong gains in Africa, South America and Asia-Pacific.