Global Oil Demand Forecast

[dan_s]

From Raymond James "Energy Stat of the Week" dated 9-12-2011

In its latest World Energy Outlook, the International Energy Agency (IEA) forecasted that global oil demand will grow from 88
MMBbls/d in 2010 to 99 MMBbls/d by 2035 – up ~11 MMBbls/d, or 13%. Do you have any clue where the extra oil supply to meet this incremental demand will come from? Neither do we. But in any case, the IEA makes one point with which we fully agree: all the demand growth that materializes should come from emerging markets, with China alone accounting for nearly half. In contrast, demand in industrialized countries (already down in five of the past six years) is projected to decline by 6 MMBbls/d by 2035.

What’s perhaps most striking about the continued strength in Chinese and other emerging market oil demand is that it’s taking place in spite of a steady downward trend in the intensity of oil consumption. This is a trend that has been visible for many decades across the industrialized world, but only recently has it become meaningful in emerging markets. In this Stat, we examine the dynamics of global oil demand against the backdrop of falling oil intensity (and, more broadly, overall energy intensity). Our key takeaway is this: Falling oil intensity has not prevented sustainable growth in global oil demand on an absolute basis, and barring some dramatic technological paradigm shift, we don’t see this changing anytime soon.