Thursday, February 20, 2014

Global Oil Demand (excerpt)

The latest data, compiled by Oil Market Intelligence, show that the global supply of crude oil jumped to another record high during January. Global demand did the same, but its growth rate is slowing, led by weakness among emerging economies. Let’s review, using 12-month moving averages to smooth out the monthly volatility in the stats:

(1) Global oil demand rose to a record 91.2mbd last month. However, the growth rate fell to 1.0% y/y, the slowest since September 2012.

(2) Emerging economies must be slowing, as evidenced by the drop in the growth rate in their demand for oil from a recent peak of 3.5% a year ago to 1.5% this January, the slowest since October 2009.

(3) Advanced economies have been reducing their oil demand since 2005. However, their demand has stabilized over the past year, with a very modest pickup in demand among the “Old World” economies (US, Western Europe, and Japan) offsetting some of the weakness in oil demand in the “New World.”

(4) US oil usage has been rising over the past year after mostly falling since the spring of 2007. In Europe, it has stopped falling over the past year after mostly falling since 2006. Interestingly, within Europe, it is still falling in Italy and Spain, while it is edging higher in Germany and the UK.

(5) China’s oil demand has stalled at a record high around 10mbd over the past seven months. Oil usage rates in Brazil and India continue to rise to new highs, though the pace of ascent may be slowing.

Today's Morning Briefing: Running Out of Gas? (1) Deep freeze freezes economy. (2) An icy soft patch. (3) Weather may not be the only reason for economic weakness. (4) Real GDP outlook: Slow H1, faster H2. (5) Slowing global oil demand suggests slower global economic growth, depressing revenues growth. (6) Oil demand slowing mostly among EMs, especially China. (7) Oil demand rising in US. No longer falling in Europe. (8) After ice melts, there will still be plenty of potholes. (9) How do positive revenues surprises square with near-zero growth? (10) Focus on underweight-rated S&P 500 Energy. (More for subscribers.)

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