Global oil demand experienced healthier than expected growth in 2018 compared to what was initially expected last year according to data published last month in the IEA’s Oil Market Report and OPEC’s Monthly Oil Market Report for February.
Global Oil Demand Growth in 2018 and 2019’s Forecast
According to OPEC’s MOMR, the global oil demand in 2018 increased by 1.47 million barrels per day compared to an earlier estimate of around 1.26 million barrels per day.
The largest contributors to such growth in global oil demand were led by USA, China, and followed by India. The total oil demand growth for the three countries accounted for approximately 1.15 million barrels / day of the overall global oil demand growth in 2018.
Global Oil Demand Growth in 2018, Source: OPEC
Based on a global oil demand growth of 1.47 million barrels per day in 2018, the global oil consumption in 2018 averaged at 98.76 barrels per day.
Important Notes on 2018 Oil Demand Growth:
- Middle East oil demand growth in 2018 was in a negative territories due to economic transformation policies which included subsidies reduction and an increase in tariffs. Last year was the first time that Middle East oil demand growth was negative since 1989.
- Asia Pacific demand growth was also in a negative territories was due to lower petrochemical feedstock demand and heavy maintenance activities.
- Healthy oil demand growth in the OECD was attributed to firm macroeconomics indicators and a growing petrochemical sector in the Americas. Growth was mainly strong for diesel fuel, get kerosene, and NGL/LPG.
Global Oil Demand Growth: 2019’s Forecast
Looking at the current anticipations of slower economic momentum in 2019, global trade concerns, demand growth for natural gas and other fuels as an alternative to oil, and the implementation of subsidies and efficiency programs for the transportation sector, global oil demand growth in 2019 is expected to slow down compared to 2018.
How much the global oil demand is expected to grow in 2019?
- OPEC Oil Demand Growth Forecast for 2019: In its forecast, OPEC sees a lower global oil demand growth in 2019 compared to 2018. At 1.24 million barrels / day oil demand growth, OPEC expects the world oil consumption to reach an average of 100 million barrels per day in 2019. The reasoning behind this lower expectation is due to lower economic expectation in 2019.
Global Oil Demand Growth in 2019, Source: OPEC
- IEA Oil Demand Growth Forecast for 2019: IEA expects oil demand growth in 2019 to stand at 1.4 million barrels per day. The reasoning behind IEA’s higher oil demand forecast is supported by lower prices and the start-up of petrochemical projects in China and the US. However, the IEA sees slowing economic growth to limit any upside.
