Global Oil Demand Begins To Grow Again

[1929crash]

Global oil demand suggests that we are really witnessing some sort of recovery.

A really useful article on the oildrum shows that during the recession world oil demand dropped from 86 million barrels per day to 84 mbd and is now beginning to grow again.

Most of the demand destruction appears to have happened in OECD countries, with non-OECD countries like India showing only stagnation.

Oil demand in the US was destroyed more in absolute barrels over the past few years than in any other region.

The severe demand destruction in the US had a lot to do with current US oil consumption patterns (76% of Americans get to and from work by driving alone) and infrastructure (average US vehicle fleet efficiency is less than half that of available technology). Relatively inefficient consumption allows for swift efficiency gains compared with other parts of the world which are already at or close to maximum technically available oil consumption efficiency.

The article doesn't really go into the question of whether it was the high oil price which triggered off the recession, nor does it give any clue as to what will happen to the global economy if demand hits mid 2008 levels.

It is however, well worth a read.

http://www.theoildrum.com/node/5765#more

Edited September 9, 2009 by 1929crash

[OnlyMe]

3.5% or so off the very, very peak demand.

An indicator of growth or more of an indicator of the absolute reliance on oil for even basic daily activity (considering Asia and the rest of the world would still grow even if the West totally imploded together with their requirement for oil).

One thing for sure any peak oil wall will be hit harder with this little spurt of QE, slamming into the debt wall and slamming into the energy wall is all the drivers are good for. No brakes, n time to sort any solutions out, as fast and and hard as possible we roll into the future.

[ParticleMan]

http://www.bloomberg.com/apps/news?pid=new...id=aQ2syO7bBqN8

Chen’s center provides commodity market research to the Chinese government. Chen said his comments only represent the views of his company and not the Ministry of Commerce.

Imports rose 1.6 percent to 9.88 million tons in the first seven months, Chen said today. Steel product exports will plunge by more than 60 percent to 20 million tons this year, he said. Shipments overseas may gain 10 percent in 2010, he said.

‘Super Cities’

The Asian nation became a net crude-steel importer for the first time in three years in March as the government’s 4 trillion yuan ($586 billion) stimulus spending spurred domestic demand even as exports collapsed.

China will consume 600 million tons of steel next year, Chen said.

“China will have 10 to 20 super cities, each with populations of more than 10 million people,†Chen said. “That will keep demand above 600 million tons over a long period.â€

Rising steel supply and a price surge earlier this year have led to a 17 percent decline in benchmark Chinese steel prices in the past four weeks.

[1929crash]

3.5% or so off the very, very peak demand.

An indicator of growth or more of an indicator of the absolute reliance on oil for even basic daily activity (considering Asia and the rest of the world would still grow even if the West totally imploded together with their requirement for oil).

One thing for sure any peak oil wall will be hit harder with this little spurt of QE, slamming into the debt wall and slamming into the energy wall is all the drivers are good for. No brakes, n time to sort any solutions out, as fast and and hard as possible we roll into the future.

On the one hand, a (temporary) global pickup will make everyone assume that the problems with debt and resource depletion are over. On the other hand, rising oil prices may act as a stimulus to investment in personnel and new capital for exploration.

Edited September 9, 2009 by 1929crash

[interestrateripoff]

Can the global economy sustain $100 a barrel??

I've read several economists who say that oil around $95-$100 will trigger a recession. Game on I think.

However if we are having a bounce wouldn't energy consumption pick up? Is demand up or are countries hoarding whilst they still can?

[OnlyMe]

German's doing well, they invested in products rather than thin air and fraud.

Must add a thick wedge to oil demand, only something like 1 in 80 or 1 in 40 (can;t find a definitive number) Chinese have a car, the numbers are tricky to get your head around.

http://www.monstersandcritics.com/news/bus...n-China-Feature

'China will definitely become the biggest car market in the world in 2009 and the biggest market for Volkswagen,' he said.

The rapid growth in overall car sales continued in August with another 1.14 million vehicles sold, up 82 per cent from the same month last year, the government said Tuesday.

'The booming sales in August has surpassed even the boldest prediction in the industry as previously sales in August are normally the weakest in the whole year,' Cui Dongshu, a spokesman for the Chinese car industry, told state media.

Compact, low-price passenger cars have driven much of the growth, but foreign makers of luxury models have also reported strong performance in China.

'We are very positive if we look at the overall market in China,' Ulrich Walker, Daimler's chief executive for North-East Asia, told reporters earlier this month.

Sales in China of Daimler's Mercedes-branded vehicles rose 49 per cent in the first seven months of 2009 while China is now the biggest market for Mercedes S-class cars.

'China is becoming an important pillar for Daimler,' Walker said.

Car loans are proving 'more and more important' for financing private car purchases in China, he said.

Edited September 9, 2009 by OnlyMe

[clockslinger]

3.5% or so off the very, very peak demand.

An indicator of growth or more of an indicator of the absolute reliance on oil for even basic daily activity (considering Asia and the rest of the world would still grow even if the West totally imploded together with their requirement for oil).

One thing for sure any peak oil wall will be hit harder with this little spurt of QE, slamming into the debt wall and slamming into the energy wall is all the drivers are good for. No brakes, n time to sort any solutions out, as fast and and hard as possible we roll into the future.

Agreed! Interesting then that Hatoyama, (Japanese PM) is making a big noise about cutting greenhoue gasses in Japan by some enormous amount over a very short time. Don't rely on imported energy if your currency is likely to be degraded. Use your economic stimulii to invest in new industries, like green technology maybe? Won't happen here.

[OnlyMe]

Agreed! Interesting then that Hatoyama, (Japanese PM) is making a big noise about cutting greenhoue gasses in Japan by some enormous amount over a very short time. Don't rely on imported energy if your currency is likely to be degraded. Use your economic stimulii to invest in new industries, like green technology maybe? Won't happen here.

Yes, rocketing oil again and a collapsing pound will be a hoot.

I have cheap alternative transport sorted now, but it will be feck all use for a lot of work activities.

[frozen_out]

Get used to it. Expansion and contraction on a regular basis is going to be a feature of the next few decades.

Every time the economy starts to recover the oil price will shoot up and the recovery will end, abruptly.

[?...!]

How much of the uptick is down to seasonal variance?

Far more people live in the Northern Hemisphere than the Southern Hemisphere.

Edited September 9, 2009 by ?...!

[yellerkat]

How much of the uptick is down to seasonal variance?

Isn't the mid-year uptick normally due to US "Driving Season"?

[aa3]

World oil demand is probably the best number when looking at the global economy. I know it is a hated word, but decoupling appears to be happening. The third world is doing amazingly well in this worldwide economic storm.

[1929crash]

Can the global economy sustain $100 a barrel??

No

However if we are having a bounce wouldn't energy consumption pick up? Is demand up or are countries hoarding whilst they still can?

Inventory Situation

At the end of 2008 OPEC members removed close to 3Mb/d from supply. This was the amount required to stabilize and reduce OECD land based storage.

While OECD land based storage is no longer increasing, global floating storage and non-OECD storage continue to creep higher. There needs to be an elimination of inventory growth in these areas in order to bring the global oil market into balance (a balanced market has inventories neither increasing nor decreasing).

This elimination of inventory growth can come from the recovery of global demand which appears to be just beginning or a further reduction in supply from OPEC. The required number is generally estimated to be around 0.5Mb/d.

[Blue Peter]

How much of the uptick is down to seasonal variance?

Far more people live in the Northern Hemisphere than the Southern Hemisphere.

The red line is a 12 month rolling average, so that should help with that point,

Peter.

[Bloo Loo]

the graph looks like a saw tooth to me, this "uptick" being just another tooth.

If you look back over the years, there seems to be a big pick up about this time, every year.

then again, what do I know?

Edited September 10, 2009 by Bloo Loo

[1929crash]

the graph looks like a saw tooth to me, this "uptick" being just another tooth.

If you look back over the years, there seems to be a big pick up about this time, every year.

then again, what do I know?

It could be just another tooth. But you need to consider all the evidence and all the charts in the original (short) article.

Just because demand appears to have turned up doesn't mean it will stay that way, as IRRO asked above, can the world economy sustain $100 bbl? If not, then we'll have another downturn, if what we are seeing now is really an upturn.

[interestrateripoff]

Perhaps demand is from hedge funds betting?

[1929crash]

Perhaps demand is from hedge funds betting?

If hedgefunds really did buy the oil, where would they store it? It really does seem as if demand has turned up. However, there is a disconnect between paper demand (from people like hedgefunds) and real demand. The price seems to be driven by a mix of both types of "demand."