OPEC lowers global growth estimate
This outpaces China’s oil demand growth of 2.73% in 2019 and 2.37% in 2020. U.S., biggest consumer
- Oil producers’ cartel OPEC said that India’s oil demand will rise at the fastest pace globally this year and the next, even as its economic expansion has slowed down.
- In its monthly ‘World Oil Demand’ report, OPEC said India’s oil demand is projected to rise by 3.21% to 4.88 million barrels per day (mb/d) in 2019 from 4.73 mb/d in the previous year. In 2020, it will further rise by 3.36% to 5.05 mb/d.
Economic woes hold sway over geopolitics
- China, however, is the world’s second-biggest oil consumer at 13.06 mb/d in 2019, behind only the U.S. whose consumption is projected at 20.94 mb/d.
- World oil demand in 2019 is expected to grow by 1.02 mb/d, which is 0.08 mb/d lower than the previous projection, OPEC said.
- The drop can be attributed to weaker-than-expected data in 1H19 from various global demand centres and slower economic growth projections for the remainder of the year,” OPEC said.
- India’s economy grew at slower than expected 5% in April-June, compared with 8% in the same quarter of 2018, and 5.8% in January-March.
Global trends Global energy consumption in 2018 increased at nearly twice the average rate of growth since 2010, driven by a robust global economy and higher heating and cooling needs in some parts of the world.
- While geopolitical tensions in the Middle East Gulf remain high, with US sanctions recently extended to more Iranian officials and a Chinese oil importer, as well as another tanker seizure, oil prices (Brent) have eased back from the most recent high of $67/bbl.
- Shipping operations are at normal levels, albeit with higher insurance costs. The messages from various parties that vessels will be protected to the greatest extent possible, and the IEA's recent statement that it is closely monitoring the oil security position in the Strait of Hormuz will have provided some reassurance.
- Demand for all fuels increased, led by natural gas, even as solar and wind posted double digit growth. Higher electricity demand was responsible for over half of the growth in energy needs.
- Energy efficiency saw lacklustre improvement. As a result of higher energy consumption, CO2 emissions rose 1.7% last year and hit a new record.
- Energy consumption worldwide grew by 2.3% in 2018, nearly twice the average rate of growth since 2010, driven by a robust global economy as well as higher heating and cooling needs in some parts of the world.