The IEA said in 2004 that oil intensity, defined as primary oil consumed per unit of GDP, in selected developing countries relative to that of the OECD, cited India, which used more than two and half times as much oil as developed countries per unit of GDP, while the economies of China, Thailand and African countries were also very oil intensive. It estimated that oil imports cost India $15 billion or 3% of its GDP in 2003. The oil-import bill increased by 16% between 2001 and 2003. And oil intensity is still increasing in many developing countries as modern commercial fuels replace traditional fuels in the household sector and industrialisation and motorisation continue apace. Rising oil intensity is reflected in the share of oil imports in total imports, which is increasing in many developing countries - - notably in China and India. By contrast, in OECD countries, the share of oil in total commodity imports by value fell from 13% in the late 1970s to only 4% in the late 1990s, but has since rebounded with higher oil prices. The 30 member countries of the OECD (Organisation for Economic Cooperation and Development) are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States. US real GDP in the period 1970 - 2003 increased by a factor of 2.74.  In the same period, US oil consumption rose from 5.36 billion barrels to 7.31 billion barrels, according to the EIA.  That's an increase by a factor of 1.36.  So oil intensity has fallen with a multiplier of 1.36/2.74 = 0.50.

The International Energy Agency, the energy watchdog of 28 developed countries including Ireland, on Monday, cut five-year forecasts for global crude demand because of the economic slump, forecasting consumption won’t regain 2008’s levels until 2012 or maybe after 2014 depending on the economic situation. The price of crude jumped above $73 in New York -- just below 50% of the the all-time intra-day record of $147.27 in July 2008. Price of crude rises to 8-month high of $73 a barrel following an attack on a Shell Oil facility in Nigeria.

The IEA cut its oil demand estimates for every year through 2013 by about 3 million barrels a day, in its latest Medium- Term Oil Market Report. Consumption will average 86.76 million barrels a day in 2012, the first year it will rise above 2008’s level of 85.76 million barrels a day, according to the Paris-based agency.

In electronic trading on the New York Mercantile Exchange Tuesday, the price of the US benchmark is $72.84 up $1.35 from Monday's close.

“There is so much uncertainty about the economic recovery and how fast it may happen,” IEA director Nobuo Tanaka said on Monday.“We may have a supply crunch again, just like last year, in 2014 to 2015. If the economic recovery is slower, we could have ample supply capacity.”

Oil demand in 2014 will rise to 88.99 million barrels a day, according to the IEA. From 2009, when oil demand will fall the most since the early 1980s, that represents an average annual increase of about 1.4%, or 1.2 million barrels a day. From 2008 levels it represents an average increase of 0.6%, or 540,000 barrels a day.

The IEA’s oil demand estimates reflect a “higher GDP scenario” based on the International Monetary Fund’s forecasts for global economic growth made last April. The IMF predicted world economic output growth to reach nearly 5% a year between 2012 and 2014, the IEA said.

The “lower GDP scenario,” which assumes that a rebound in the global economy will be 3% a year, the IEA said global oil demand could fail to reach last year’s levels by 2014, standing at 84.92 million barrels a day, 6.34 million barrels less than predicted in December.

The IEA said the combination of weak demand and lower prices could undermine future investments. Despite the expected relief on engineering, procurement and construction costs, project sponsors face both financing problems and increasing uncertainty about when and at what pace the economy and therefore gas demand will recover. Besides the recession, the increasing awareness of climate change issues puts a question mark on the future role of gas. Increased energy efficiency and renewables could put downward pressure on gas demand; but increased wind capacity calls for gas-fired plants as reserve capacity.

The puzzle of the oil price surging last summer then collapsing and subsequently recovering rapidly was examined in 2008 by Richard S. Eckaus, a professor of economics at the Massachusetts Institute of Technology, in a paper for the Center for Energy and Environmental Policy Research titled The Oil Price Really Is A Speculative Bubble.

He wrote that “there seems to be a preference for the claim that the price increases are the result of basic economic forces: rapid growth in consumption, pushed particularly by the oil appetites of China and India, the depreciation of the US dollar, real supply limitations, current and prospective and the risks of supply disruption, especially in the Middle East.” He briefly explores - - and debunks - - each of those possibilities, writing that the price of oil is behaving much like any other speculative bubble, and encourages efforts to “break the bubble” given its adverse effect on the economy.