According to the IEA’s statement, the production of bio fuel declined in 2011 – 1819K barrels a day against 1822K b/d in 2010. This is the first decline in 10 years. The IEA says it will increase the demand for oil products in the coming years.
The global production of bio fuel used to be supported mainly the US and Brazilian subsidies. The US used to spend 6B dollar a year on bio fuel production. Later the US and Brazil decided to reduce their investments in bio fuel production, which resulted in the mentioned decline.
The production volume is expected to keep declining, which will support global oil prices, IEA analysts say.
The Russian Biofuels Association (RBA) says the IEA’s conclusions are of speculative nature because the world’s major bio fuel producers haven’t released their reports yet. Moreover, according the RBA’s preliminary estimation, the global production volume of bio fuel grew in 2011 and is expected to continue the tendency.
According to the FMA-Sar Department of , the market of crude oil is still in uptrend. The next price targets are 104.40, 104.85 and 105.65. Alternatively, the consolidation will go on.
