Global Oil Demand Showing Slower Growth
Ed Yardeni | May 21, 2014 12:13AM ET
According to Oil Market Intelligence (OMI), world crude oil supply rose to a record 90.2mbd on average over the past 12 months through April. The price of a barrel of Brent crude oil has been remarkably flat (with some volatility) around $110 since early 2011. World oil supply has been well balanced with world oil demand at this price.
Let’s review some of the highlights of the latest demand data compiled by OMI through April using 12-month averages to smooth out seasonal volatility:
(1) World. World crude oil demand rose to a record 91.7mbd last month. However, the growth rate has slowed from a recent high of 1.5% y/y during September 2013 to 1.0% during April. This suggests that the global economy is growing, but at a relatively slow pace.
(2) Emerging countries. Most of the recent slowdown is attributable to emerging economies. The OMI data show that the growth rate among non-OECD countries is down from 3.7% a year ago to 1.9% currently. Among the 34 advanced economies of the OECD, oil demand growth is close to zero on a y/y basis, but that’s an improvement from negative readings during 2012 and 2013.
(3) China and India. Oil demand rose sharply in China from 2009 through mid-2013. Since then, it’s been flat around a record 10mbd, confirming that the country’s economy is in the midst of a significant slowdown. On the other hand, India’s oil demand rose to a record high of 3.8mbd last month, up 3.8% y/y.
(4) Europe. I have often shown that oil demand is a useful indicator of economic growth. In addition to suggesting a significant slowdown in China, it is confirming that the Eurozone’s economic recovery is very weak. Oil demand in Germany has been flat around 2.4mbd since 2010. Demand in France, Italy, and Spain remains on a downtrend that’s been going on for over five years.
Today's Morning Briefing: The Oil Story. (1) Regina and Saskatoon. (2) Bigger than Saudi Arabia. (3) Counting rigs. (4) National oil companies seeking experienced Western partners. (5) $110 a barrel remains the right price for now. (6) Global oil demand at record high, but growing slowly. (7) Emerging economies are slowing. (8) China’s oil demand has been flat for a year at record high. (9) Eurozone oil demand confirms weak economic recovery. (10) Focus on underweight-rated S&P 500 Energy sector.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.