The IEA has once again revised its global oil demand forecast upwards for 2010 – but only by 150,000 barrels per day, to 86.5m b/d.
Meanwhile the agency now has even more conviction that OECD oil demand may well have already peaked – so much so that its latest monthly oil report’s first special feature talks of an ‘oil-less recovery’.
OECD oil demand fell 4.4 per cent in 2009 according to the latest estimates, and will remain flat this year despite the expected economic growth.
Here are their demand revisions, in the context of GDP forecasts:
Since we first released detailed 2010 projections back in July, the outlook for OECD economic growth has improved from around zero to +2.1%. But over the same period, expected OECD demand has barely changed, averaging 45.5 mb/d this month versus an estimate of 45.2 mb/d then. Even the recent record US and European winter snows look unlikely to revive OECD demand – which remains flat at best in 2010 – an ‘oil‐less’ recovery indeed.
Although the expected net increase in crude demand – of 1.6m b/d in 2010 – looks consistent with historical correlation between growth and oil prices; the IEA says there are so many “known unknowns” about the economic recovery that it has also provided a low-growth estimate of 1.2m b/d.
Also interesting is the more dramatic disparity between non-OECD GDP forecast rises, and the corresponding increase to expected oil demand:
Meanwhile, forecast 2010 non‐OECD demand has risen from 40 mb/d last July to 41 mb/d now (partly on a higher 2009 base). Anticipated GDP growth here has gone from 4.1% to 6.1%. Global oil demand now takes its cue primarily from rising emerging country incomes.
This, they write, is unsurprising – use of oil for heating in OECD countries has fallen 40 per cent since 2000. It’s the same story: automotive, aviation and power generation industries are all getting cleaner:
Environmental imperatives mean that gas, renewables and nuclear power will increasingly be preferred, even if binding climate change targets are stalled for now. Transportation oil use may still grow in the OECD, but here too vehicle efficiency standards and the penetration of biofuels, hybrid and electric vehicles will limit requirements for refinery‐sourced gasoline and diesel. So demand growth in the OECD may well have peaked, with all the negative consequences for OECD refining this implies.
Those refining headaches are not set to go away any time soon, then.