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Page added on September 2, 2017

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Oil Demand Is Growing Nearly Everywhere


Earlier today I delivered the keynote address at theĀ Uintah Basin Energy Summit in Vernal, Utah. The Uintah Basin is an oil-producing region predominantly in the eastern portion of Utah.

Like many other oil-producing states, Utah saw its oil production more than double from 2004 to 2014, before retreating in the face of the oil price crash. Utah oil producers, like oil producers everywhere, are intensely interested in what comes next in the oil industry.

The thrust of my talk was to argue that the oil age isn’t in its death throes. My presentation examined the past dozen years of the oil cycle, with a focus on OPEC’s role in first driving oil prices to $100 a barrel (bbl), and subsequently in helping drive prices below $30/bbl. An analogy I used was that U.S. shale producers “started the fire” by adding so much oil production to the market, and OPEC eventually “threw gasoline on it” when they increased production in 2014. The combination of the two actions crashed oil prices.

As I was preparing for my talk, I broke down oil demand growth in the past five years in various regions of the world. I chose the past five years, because those years have marked rapid growth in sales of electric vehicles (EVs). If the near-term peak oil demand hypothesis is true, you might expect to see a slowing of oil demand growth in regions with fast growth in EVs. (For more details on the peak oil demand hypothesis, see Peak Oil And Peak Demand Have Entirely Different Outcomes).

Here is what the past five years of oil demand growth have been like around the world:

Robert Rapier

Oil demand growth 2011-2016.

Global oil demand during that time grew by 6.8 million barrels per day (BPD), with 69% of that growth taking place in the Asia Pacific region. Far behind in second place was the Middle East, which saw demand increase by one million BPD. Notably, oil demand growth accelerated relative to the previous five-year period of 2006-2011 in Asia Pacific, Africa, the U.S., and for the world as a whole.

The only notable exception, with a decline in oil demand, was the European Union (EU). In the past five years, oil demand in the EU fell by nearly 600,000 BPD. Oil demand fell in most European countries over the past five years, with some noteworthy exceptions. One was Norway, which despite being the world leader in growth and total market share for electric vehicles (EVs), saw its oil consumption grow by 1%. In comparison, oil demand in the EU fell by 4.1% during that time. (Note that Norway isn’t in the EU, but it is surrounded by EU countries that saw oil demand decline during the past five years).

Oil demand in some other developing regions is growing as fast as it is in the Asia Pacific regi s, but from a lower demand level. Africa, for instance, saw its demand grow by 16% in the past five years, just short of Asia Pacific’s leading 16.1% growth:

Robert Rapier

Percentage growth in oil demand 2011-2016.

Global oil demand grew by 7.6% during the period.

My conclusion was that outside of the EU, there are no clear cut examples of declining oil demand in the past five years. To the contrary, oil demand continues to increase in most regions of the world, including those with high growth rates for electric vehicles.

Robert Rapier has over 20 years of experience in the energy industry as an engineer and an investor. Follow him on Twitter @rrapier or at The Energy Letter.


17 Comments on "Oil Demand Is Growing Nearly Everywhere"

  1. Dredd on Sat, 2nd Sep 2017 9:39 am 

    The thrust of my talk was to argue that the oil age isn’t in its death throes.” – Forbes

    “The fundamental activity of human civilization is repetition” (Groundhog Day & The Climate of Fear – 3).

  2. Tom on Sat, 2nd Sep 2017 11:41 am 

    This should be no surprise to anyone, Peak Oil Demand is not supposed to hit for a decade or two.

  3. Tom on Sat, 2nd Sep 2017 11:46 am 

    and even when Global Oil Demand does peak, it is expected to peak at somewhere around 125 Million Barrels/Day.

  4. rockman on Sat, 2nd Sep 2017 1:33 pm 

    Tom – It will be interesting to see if we get anywhere close to that number. Between a decrease in new discoveries and lower prices ramping up consumption that also ncreases the depletion rate time will tell. Especially if we see oil moves above $60+/bbl for an extended period of time IMHO.

  5. Davy on Sat, 2nd Sep 2017 1:47 pm 

    “This should be no surprise to anyone, Peak Oil Demand is not supposed to hit for a decade or two”

    Tom, yea, if the economy remains in growth. Does anyone know how long that is? Certainly a decade or two is pushing the limits of a prediction especially considering all the current economic issues associated with debt and unfunded liabilities.

  6. Harquebus on Sat, 2nd Sep 2017 4:47 pm 

    When the credit bubble pops, the peak oil world which we have been living in for the last decade and which has been hidden from view will be exposed for all to see.

  7. Kenz300 on Sun, 3rd Sep 2017 10:35 am 

    Forbes — spokesman for the fossil fuel industry.

    Keep those ad dollars coming in.

  8. bobinget on Sun, 3rd Sep 2017 1:17 pm 

    Please; EXACTLY where is oil demand NOT
    Don’t quote drops in percentage growth. Unless that percentage is 101% it don’t count.

    Now, point to a single OPEC or NOPEC nation where any profit is to be made at current PoO.

    (oil not gas)

  9. bobinget on Sun, 3rd Sep 2017 1:35 pm 

    This JUST in:
    Trump: US considering ‘stopping all trade’ with countries doing business with N. Korea

    I guess we better get set to blockade every Chinese port. I’ll bet China won’t like that!

  10. bobinget on Sun, 3rd Sep 2017 1:44 pm 

    BTW: a blockade is tantamount to an act of war.
    Casus Belli.
    a quick check of nations Our Great Leader proposed to ‘quarantine’ :
    The top export destinations of North Korea are China ($2.34B), India ($97.8M), Pakistan ($43.1M), Burkina Faso ($32.8M) and Other Asia ($26.7M). The top import origins are China ($2.95B), India ($108M), Russia ($78.2M), Thailand ($73.8M) and the Philippines ($53.2M

    OK, war with Burkina Faso* might be a snap.
    The others, Pakistan AND India and China might
    put a strain on our current armed forces.

    *You don’t know where Burkina Faso is do you?
    Neither do I.

  11. Davy on Sun, 3rd Sep 2017 1:46 pm 

    Bob, calm down, where does it say blockade? Sensationalism is extremism when used improperly. I think you are in extremist territory.

  12. Davy on Sun, 3rd Sep 2017 1:48 pm 

    Africa, Bob, google will tell you

  13. Tom on Sun, 3rd Sep 2017 1:55 pm 

    All the BS stuff in the media has made no sense for a while…

    The media & US Government would ha e us believe their nuclear & rocket programs are growing faster than what is possible…

    One week they have a rocket capable of reaching Japan
    The Next Week Guam
    The next week they are capable of hitting Chicago
    The next week they developed Fusion Bombs…

    It’s all BS… Propaganda…

    But why??? Well, probably as an excuse to blockade China & shut down their economy / crude oil demand…

    This would explain why so many US destroyers keep getting rammed over there (like 4 this year – not a coincidence)…

  14. Tom on Sun, 3rd Sep 2017 3:38 pm 

    posted that on the wrong page…

  15. onlooker on Sun, 3rd Sep 2017 3:42 pm 

    Well, anyway Tom, you deserve the credit for that keen observation

  16. Davy on Sun, 3rd Sep 2017 3:45 pm 

    Tom, blockade China? Please start talking reasonably. No one in the US is thinking about that because it is not something the US could or would do.

  17. onlooker on Sun, 3rd Sep 2017 3:53 pm 

    Yes, Tom that is really asking for WWIII. You could say an act of war.

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