It seems that Price rise has stopped having a negative impact on demand, at least that’s what’s happening in the oil sector. Despite rising retail prices, demand for oil has strengthened in 2012, mostly driven by overwhelming Chinese consumption. On the supply side, though the non-opec producers have fallen short, opec has filled the gap to maintain a smooth flow.
China rules the day
Global oil demand is expected to remain strong in the second quarter of 2012. This demand growth is primarily driven by accelerating non-OCED income, which has almost negated the adverse impact of higher oil prices. Region wise, oil consumption is expected to shrink in Europe and North America. And the reasons are obvious. While Europe is struggling to get its debt loaded countries out of the trap, North America is still to come out of the aftermaths of the 2008 recession. Hence, economic activity in both these regions is bound to be disappointing. On the other hand, consumption in Asia-Pacific is expected to hold on to strong growth. More so, for the overwhelming Chinese demand. China is expected to maintain its dominance in 2012, by consuming as much as 9.9 mb/d, a growth of 0.4 mb/d y-o-y.
Gasoline drives demand
Global demand for oil grew about 0.3% year-on-year in the first quarter of 2012. Average demand during this period remained at 89.5 mb/day. However, marginally improved economic activity in various parts of the world is expected to give another 0.7% y-o-y push to the oil demand during the second quarter. In total, global oil demand is expected to expand by 0.8 mb/d or 0.9% in 2012 to 90 mb/d. What’s good for the oil producers is the fact that the demand growth is expected despite a 15% rise in global crude prices during the year. This demand growth is mostly anchored by gasoline and diesel. Having fallen to around 80 kb/d last year, gasoline demand is forecasted to expand by 180 kb/d in 2012, as it continues to replace diesel and petrol.
China rules the day
Global oil demand is expected to remain strong in the second quarter of 2012. This demand growth is primarily driven by accelerating non-OCED income, which has almost negated the adverse impact of higher oil prices. Region wise, oil consumption is expected to shrink in Europe and North America. And the reasons are obvious. While Europe is struggling to get its debt loaded countries out of the trap, North America is still to come out of the aftermaths of the 2008 recession. Hence, economic activity in both these regions is bound to be disappointing. On the other hand, consumption in Asia-Pacific is expected to hold on to strong growth. More so, for the overwhelming Chinese demand. China is expected to maintain its dominance in 2012, by consuming as much as 9.9 mb/d, a growth of 0.4 mb/d y-o-y.
Gasoline drives demand
Global demand for oil grew about 0.3% year-on-year in the first quarter of 2012. Average demand during this period remained at 89.5 mb/day. However, marginally improved economic activity in various parts of the world is expected to give another 0.7% y-o-y push to the oil demand during the second quarter. In total, global oil demand is expected to expand by 0.8 mb/d or 0.9% in 2012 to 90 mb/d. What’s good for the oil producers is the fact that the demand growth is expected despite a 15% rise in global crude prices during the year. This demand growth is mostly anchored by gasoline and diesel. Having fallen to around 80 kb/d last year, gasoline demand is forecasted to expand by 180 kb/d in 2012, as it continues to replace diesel and petrol.
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