HSBC Private Bank's head of global strategy is bullish on oil prices for the next 12 months as demand for fuel from China and emerging markets continues to rise.

Fredrik Nerbrand, head of global strategy at HSBC Private Bank, said that the current price of $50 per barrel has lots of room for growth, despite a fall in demand from developed markets.

He said the world is nearing the point of "Peak Oil", the point when productivity reaches its maximum rate, as reserves continue to decline.

He added that recession had made it clear that "even under the most depressed economic scenarios there is a shortage of oil."

"The economic decline witnessed over the last year has had a big impact on oil demand, falling 1.4% globally for the latest figures ending 2008. Supply over the same period remained static, leading to a period of oversupply in mid-2008 but ending the year with a deficit of 0.6 million barrels of oil produced a day as demand ticked-up again in the final quarter."

The largest demand increase in 2008 has been from China, up 7.2%, and has been rising every year since 1993. China demand now constitutes nearly 10% of world demand having risen 27% since 2004, by far the largest increase of all world regions.

Non-OECD countries have also seen uninterrupted rises in demand since 2004 implying that almost all demand increases have originated from developing economies.

The potential for further increases in oil demand from China can be estimated by looking at the number of barrels consumed per capita.

At present 2.2 barrels are consumed per person in China every year and is rising at an annual rate of 5.5% a year. If this annual rate is compounded annually to 2020 our estimations suggest that China’s share of demand would increase from its current 10% to 18%.

Based on HSBC's estimates, this has boosted the global economy (net oil importers) by around $2.7 trillion since the peak in oil prices.

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