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THEMES // SUPPLY INELASTICITY // DEMAND IS GROWING, DEMAND OUTSTRIPPING SUPPLY |
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Demand Is Growing
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// Sources: IMF World Economic Outlook, April 2005;
Energy Information Administration International Energy Outlook 2006;
International Energy Agency World Energy Outlook 2006. NB –IEA did not provide projections for 2020
- A global population boom, coupled with the increased industrialization of
emerging regions going forward, herald an explosion in global oil demand.
- China is a notable (albeit predictable) destination for an increasingly large amount of Japanese exports.
- Taken in the context of reduced production and discovery, the only logical conclusion is higher oil prices in the future.
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Demand Will Outstrip Supply
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The phenomenal growth in global population will continue to place increased demands on the global energy markets.
- Unprecedented growth in both China and India will, when added to existing demands,
place an enormous strain on the oil market.
- Both of these markets need to provide annual growth rates of over 8% just in
order to provide jobs for the tens of millions joining the workforce each year.
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