Oil demand falls at fastest rate since 1982, says BP
For the first time, demand from developing economies outstripped the OECD
Thursday 11 June 2009
Global oil demand dropped for the first time in 15 years in 2008, falling at its sharpest rate since 1982, according to the industry-leading BP statistical review published yesterday.
Total worldwide consumption dropped by 0.6 per cent – equivalent to 420,000 barrels per day (bpd) – and demand from developing economies, particularly China, outstripped that from OECD countries for the first time. As the developed world curtailed its appetite for oil by 1.5 million bpd – spurred first by eye-watering prices and then by sharply braking economic growth – non-OECD countries also registered slower growth in demand at just 1.1 million bpd.
But the big story last year was China, and not just with regards to oil. Global energy consumption grew by just 1.4 per cent in 2008, its smallest rise since 2001. And China accounted for three-quarters of it.
The US is still the world's most energy-hungry nation, gobbling a whopping 20.4 per cent. But demand was down 2.8 per cent last year, the biggest contraction for a quarter of a century. Meanwhile, Chinese energy usage shot up by 7.2 per cent, its slowest rate for five years but still enough to take the rapidly industrialising nation to a 17.7 per cent share. No other country is even in double figures.
Tony Hayward, the chief executive of BP, said: "The centre of gravity of the global energy markets has tilted sharply and irreversibly towards the emerging nations of the world, especially China."
The shift is not likely to reverse, according to Mr Hayward. "This is not a temporary phenomenon but one that will only increase still more over time," he said. "It will continue to affect prices and bring with it new challenges over economic growth, energy security and climate change."
The short-term effect on prices has been significant – most notably for oil. After a run of price rises unprecedented in the oil industry's 150-year history, the average oil price rose for the seventh consecutive year to hit $97.26 per barrel last year, up 34 per cent from 2007. But it was enormously volatile – soaring to the all-time $147 per barrel high in late July before plummeting to below $40 by the end of the year. Prices are now back on the rise, more than doubling so far this year already (see below).
Gas and coal prices have followed a similar trajectory. Overall gas consumption grew more slowly in 2008, below the decade average at 2.5 per cent. Again the fastest rise was in China, with consumption up by 15.8 per cent, compared with just 0.6 per cent in the US and 3 per cent in the UK. Even though last year's 3.1 per cent rise in coal usage was below the 10-year trend, it is still the fastest growing fuel source. Some 43 per cent of global demand for coal is from China, as was an 85 per cent share of last year's growth. With prices rising faster than for any other fossil fuel, demand grew by a measly 0.6 per cent outside the Middle Kingdom. Inside China, it was up 6.8 per cent.
Despite lower demand for oil, production rose by 0.4 per cent – equivalent to 380,000 bpd – as Opec, the 12-strong cartel of oil-producing countries, tried to cash in on the high prices. Opec production grew by 2.7 per cent, almost 1 million bpd, last year, largely thanks to big increases in the Middle East. Saudi Arabia boosted its output by 400,000 bpd and Iraq by 280,000.
Worldwide proven oil reserves, excluding the controversial Canadian tar sands, stand at 1.26 trillion, enough for another 42 years of production at last year's rates. There is enough gas for another 60 years and enough coal for another 122, says BP.
The oil price bubble: Up, up and away
The steadily rising oil price broke through yet another psychological barrier yesterday, breaking $70 per barrel for the first time since October.
So far this year, oil has nearly doubled and members of the 12-country Opec oil producers' cartel have made the first hints that supply could increase if the price keeps rising.
After an all-time high of $147 last July, the price fell through the floor as the world slid into recession, dropping below $40 by the end of December.
Opec has cut 3.2 million barrels per day (bpd) from production since the autumn to try to halt the collapsing price. But at the group's meeting in Vienna last month, it decided that rising demand obviated the need for further cuts.
Saudi Arabia, the biggest Opec member, is thought to favour a price upwards of $80 per barrel. The Kuwaiti oil minister, Sheikh Ahmad al-Abdullah al-Sabah, intimated a similar target yesterday. "At $75 [Opec] will not increase output, but if it reached $100, then maybe," he said.
Meanwhile, Gazprom, the Russian energy giant, is supporting calls for a new Global Oil Agency to stabilise prices while ensuring investment and avoiding future spikes.
Alexei Miller, Gazprom's chairman, said: "It is only by ensuring a reliably high oil price that we will be able to support investment programs of producers and to launch real projects to increase energy efficiency among consumers."
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 4 When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- 5 Terror threat level raised to severe as PM warns Isis risk could last for decades
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Terror threat level raised to severe as PM warns Isis risk could last for decades
Isis 'A Message in Blood' video shows beheading of Kurdish man in Iraq
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- < Previous
- Next >
iJobs Money & Business
£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...