India, China driving global oil demand: US President

Increased use of energy resources by fast growing economies like India, China and Brazil is driving the global oil and gas demand, US President Barack Obama said.

                             World Oil

"The problem is a great deal of uncertainty in the oil markets, part of it prompted by the fact that the economy's growing faster in some places than others, but you've got China and India and Brazil and other emerging nations that are using more and more energy as their economies advance," Obama said at a news conference when asked about the rising gas prices in the US.

Following the current unrest in the Middle East, gas prices in the US have crossed USD 3.5 a gallon and is expected to further go up, which is prompting demand of use of strategic oil reserve, which Obama said, is an option not under consideration right now because there is no major disruption in oil supplies.

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Obama said the idea behind the Strategic Petroleum Reserve is if there was a severe disruption in supply, similar to what happened in the '70s, for example, when OPEC making a decision not to sell for a while, how would the US economy continue to function, and making sure that Americans have sufficient supplies for that.

"Another example would be during Hurricane Katrina when you've got a whole bunch of refineries that have been impacted and production in the Gulf has been impacted. You know, that's another example where in a short term you can fill that hole," he said.


Obama said rising prices are not a new phenomena. "Three years ago, before the recession hit, a combination of factors, including rising demand from emerging economies like China, drove gas prices to more than USD 4 a gallon," he said.


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Obama said the turmoil in North Africa and the Middle East has added uncertainty to the mix, and lost production in Libya has tightened supply.

(C) The Economic Times India