In its latest monthly report, OPEC revised up its projection for global oil demand growth, jumping 30,000 barrels per day in October. That would put 2015 demand growth at 1.53 million barrels per day (mb/d), with global consumption averaging 92.88 mb/d this year.
In absolute terms, the U.S. and China will post some of the world’s strongest increases in oil consumption in 2015, each jumping by about 380,000 barrels per day. But in percentage terms, India’s 5 percent expansion in consumption is the world’s fastest among large countries.
Gasoline sales in the U.S. are surging, growing quickly in corresponding fashion to the strong sales for vehicles. In September, U.S. gasoline sales jumped by 450,000 barrels per day, or 5 percent higher from a year earlier. That is the largest monthly gain since 1983, and the second most on record. Related: Inflated EIA Data Could Keep Oil Prices Subdued Next Year
The upward revision in OPEC’s projection for 2015 crude oil demand growth also stemmed from stronger than expected sales in Europe. Vehicle sales are also strong in Europe, and a stretch of cold weather also added to consumption levels. Still, Europe won’t be a source of rapid growth in 2016.
China is still adding demand to global markets, but not at the rate of years past. In October, China’s oil demand grew by 3 percent, year-on-year. The economy is slowing and significant uncertainty still surrounds the health of the stock market, manufacturing activity, and large debt levels.
India has quickly emerged as arguably the most important country in terms of growth in demand. In October, India’s consumption levels grew by 590,000 barrels per day, a 17 percent jump from a year earlier. Oil demand in India is still growing from a small base, but by all accounts, it will post some of the most blistering growth rates in the coming years, just as demand slows in China. Related: Tick Tock: Time Running Out for Struggling Oil and Gas Drillers
On the downside, Japan’s oil consumption fell in October, after several months of growth. Japan burned through 63,000 barrels per day less in October 2015 than a year earlier, a 2 percent drop year-on-year. Brazil, suffering through a recession, also saw demand drop off.
Despite the higher-than-expected oil demand growth rates, the OPEC projection is lower than the IEA’s more bullish 1.8 mb/d. OPEC sees global demand slowing to 1.25 mb/d in 2016, with daily consumption expected to average 94.13 million barrels over the course of the year.
By Charles Kennedy of Oilprice.com
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