IHS CERA: World Oil Demand Set to Resume Growth; Return to Pre-recession Levels

World oil demand is set to grow next year for the first time since 2007 and return to pre-recession levels by 2012, according to IHS Cambridge Energy Research Associates (IHS CERA) in its quarterly World Oil Watch report. The rebound would mark a turnaround from the largest drop in global oil demand since the oil crisis of the early 1980s.

IHS CERA expects oil demand growth to resume by 900,000 barrels per day (bd) in 2010 and return to its 2007 high of 86.5 million barrels per day (mbd) by 2012-a five year turnaround.

“There are a lot of questions as to whether things will be ‘different this time’ in terms of the recovery of oil demand,” said IHS CERA chairman and Pulitzer Prize-winning author of The Prize, Daniel Yergin. “While the answer is that it will be shorter, it is still going to take a substantial amount of time.”

Oil demand dropped by 2.8 mbd from its high point of 86.5 mbd in 2007 to 83.8 mbd in 2009. The last time that the world experienced such a severe decline in oil consumption was in the early 1980s and it took nine years for demand to return to the 1979 pre-recession high. A five year turnaround-while still a substantial amount of time-would be swift in comparison.

The key differences between the current recovery and that of the 1980s are demand from emerging markets and fewer options for substituting fuels on a global scale, said IHS CERA global oil managing director, Jim Burkhard.

Oil Online