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Page added on April 14, 2016
This country could drive oil demand growth
Global oil demand growth is forecast to ease further in 2016, the International Energy Agency (IEA) said on Thursday, predicting a slowdown in demand from some of the world’s top consumers and a rise in demand from one particular economy.
Growth in global oil demand will ease to around 1.2 million barrels a day in 2016, the IEA said in its latest monthly report published on Thursday, below 2015’s 1.8 million barrels a day (mb/d) expansion. This would take place, the IEA said, as “notable decelerations take hold across China, the U.S. and much of Europe.”
It said such decelerations in those countries were the result of “slower industrial activity and generally mild recent winter temperatures” in member countries of the Organization of Economic Co-operation and Development (OECD). The agency also highlighted slower demand growth in China as the economy focuses on consumption rather than heavy manufacturing for its growth.
In contrast, the agency said that emerging economic powerhouse India could be replacing China as the “main engine of global demand growth.”
“Strong gains in India remain one of the most persistent demand supports showing that if an economy remains fundamentally robust lower-oil prices can stimulate additional demand,” the IEA noted.
Revised data for late 2015 and early data for 2016 showed year-on-year (y-o-y) oil demand growth of approximately 8 percent, the IEA said, and for 2016 as a whole, India will see growth of around 300,000 b/d – “the strongest ever volume increase.”
On a global level, the IEA said that preliminary data in the first quarter of 2016 showed the slowdown in global oil demand growth was already happening with year-on-year growth down to 1.2 mb/d after gains of 1.4 mb/d in the fourth quarter of 2015 and 2.3 mb/d in the third quarter of 2015.
In the meantime, it said OPEC’s crude oil production fell in March to 32.47 mb/d (still above the 13-member group’s official output ceiling of 30 mb/d) “as ongoing outages in Nigeria, the UAE and Iraq more than offset a further increase from Iran and higher flows from Angola.”
On a global level, oil supplies fell by 300,000 b/d in March to 96.1 mb/d with much of the drop in supply originating in the U.S. where it said the slide in light, tight oil production was “gathering pace” with data illustrating that by early April, the rig count had fallen nearly 80 percent from the peak seen in October 2014.
The latest data comes ahead of the closely-watched meeting of OPEC and non-OPEC producers in Doha, Qatar, on Sunday at which producers are to discuss freezing output levels in a bid to support prices. The IEA said that if there was to be a production freeze, “the impact on physical oil supplies will be limited.”
However, the IEA was confident that steady oil demand growth and falling non-OPEC supply meant that the oil markets looked set “to move closer to balance in the second half of this year.”
Current oil prices, with Brent crude trading at $43.57 a barrel on Thursday and U.S. WTI at $41.17, showed that this was taking shape, the IEA said, although it noted that part of the recent support for prices was the expectation of some kind of output freeze in Doha.
9 Comments on "This country could drive oil demand growth"
Davy on Thu, 14th Apr 2016 7:04 am
“Strong gains in India remain one of the most persistent demand supports showing that if an economy remains fundamentally robust lower-oil prices can stimulate additional demand,” the IEA noted.”
Poor people at IEA if they are banking on India to save the day they are getting desperate. India’s economy is a ship wreck waiting to happen. Their huge population overshoot is ready to implode the economy and ecosystem. India is in the cross hairs of climate change. There is nothing optimistic going on in India. India should be best known for the breeding ground for super bugs and call centers. They are just another Bric failure.
Mark on Thu, 14th Apr 2016 7:38 am
The end of exponential conspicuous growth has arrived. It’s going to be a tough lesson to learn.
India is late to a game that’s already over.
PracticalMaina on Thu, 14th Apr 2016 8:26 am
That country looks like it needs to go back to rickshaws and maybe throw in some small electrified transportation. The only thing an ICE is good for in gridlock is poisoning the air.
GregT on Thu, 14th Apr 2016 9:56 am
That traffic jam makes my past morning commute look like a stroll in the park on a warm mid-summer’s night eve. Where’s all of the single occupant, 3/4 ton, 4 door, 4 wheel drive, 8 cylinder, Detroit cummins diesel pickup trucks? People on foot? Wow. India has no where near as far to fall as we do in the west. The future for everyone is going to look much more like the picture above, than it will resemble anything even close to what we here take for granted on a daily basis.
And to think that India continues to grow at a rate of almost 8% per annum, while our economies in the west continue to stagnate. The BRICS continue to hum along. The west is a dead man walking, going further and further into the mountain of un-repayable debt. We are living far beyond our means.
Davy on Thu, 14th Apr 2016 10:01 am
India is one of the most overpopulated place on earth that will be the worst possible place to be as the entire world flys apart. Locust storm is what India is.
GregT on Thu, 14th Apr 2016 10:29 am
The vast majority of the people in India still live in rural areas, in what we would consider to be abject poverty. They still work the land manually, and with animals. When the world flies apart, those who are not dependant on fossil fuels for food production will fare much better than those who do. The worst possible places to be anywhere in the world, will be in places most reliant on modern industrialism. That would include some 90% of the places that people currently enjoy living in, here in North America.
Davy on Thu, 14th Apr 2016 12:44 pm
We are all dependent on fossil fuels. The romantic notion of the nobel subsistance farmer is bunk. India’s rural areas are urban areas by many standards per less populated nations. Any notion of Indians surviving better than westerners with the coming collapse is reaching into the agenda rhelm of people who are apologists for their high standard of living.
India is worse than China in overpopulation and all the ills associated with them. India and China will be where the majority of the die off occurs because they have the majority of the world’s population in the overshoot catagory.
PracticalMaina on Thu, 14th Apr 2016 1:57 pm
Subsistence farmers do exist but they are dying out. Climate change due to fossil fuel usage is making the rain they rely on unreliable. Just because someone who is farming has neighbors close bye does not mean they depend on globalism.
India and China may destroy themselves with thirst in the near term if they do not stop wasting water for producing power with coal.
theedrich on Sat, 16th Apr 2016 3:38 am
Too many wogs in India? No problem! Bring them all to the U.S. Indians have learned from Mexico that the best way to relieve your biological urgencies is to unload all of your defecatory matter on “diversity-seeking” America. Its White-Guilt psychotics welcome them all.