Click here for the top 10 rankings in the regionOctober 8, 2015 6:09
BP says 2009 oil use drop biggest since 1982
Global oil consumption fell by 1.2 million barrels a day last year, but is likely to rise on strong demand in emerging economies, UK’s BP said.
June 10, 2010 9:46 by Rasha Reslan
Economic recession cut global oil consumption for the second consecutive year and the world’s primary energy use for the first time since 1982, BP said in its annual Statistical Review of World Energy.
“The strong link between energy and the global economy asserted itself,” Christof Ruehl, BP’s chief economist, told a conference at the release of the review.
“Global oil demand is no longer declining … (and) appears to be on the rising path in 2010,” he added.
Ruehl said the growth in demand would continue to come from Asia, while demand from developed countries has already peaked.
“All the demand growth came from China, Saudi Arabia and India,” he said, while demand fell in OECD countries to the lowest level since 1995.
Ruehl attributed the fall in OECD demand to high prices, changes in technology and increased energy efficiency.
“OECD demand has peaked and is unlikely to recover to the peak in 2005,” he said.
International benchmark US crude was trading around $74 a barrel on Wednesday, a rise from about $32 in late December 2008.
Crude oil prices rose more quickly than other fuels due mainly to a large 4.2 million bpd output cut implemented by the Organization of the Petroleum Exporting Counties (OPEC) in late 2008, Ruehl said.
On the other hand, output from outside OPEC increased, with the biggest growth contribution coming from the US Gulf of Mexico.
Overall, the world’s oil production dropped last year more sharply than consumption by 2 million bpd, or 2.6 percent, which was also the largest decline since 1982, BP said.
The current prices, however, may be a sweet spot to maintain investment, Iain Conn, BP’s managing director, said.
“Our price assumption is $60-$90 a barrel is an appropriate range for planning,” Conn said at the conference.
The world’s proven oil reserves stood at 1.33 trillion barrels last year, an increase of 700 million barrels from 2008.
Gas reserves grew by 2.21 trillion cubic meters last year, while production fell by 2.1 percent, marking the first decline on record, BP said.
Refining margins were pressured, with BP’s global indicator averaging around $4 a barrel, the lowest level in 7 years, capacity additions totaled 2 million bpd last year. BP said.
Asia-Pacific accounting for 80 percent of the increase.
Global refining utilization rates fell to a 15 year low of 81 percent and unused capacity currently exceeds 17 million bpd due to run cuts.
“Run cuts so far have disproportionately concentrated in OECD countries,” Ruehl said.
“Further consolidation is inevitable.”
Meanwhile, OPEC on Wednesday slightly revised up its forecast for world economic growth but left 2010 oil demand largely unchanged as Europe’s debt crisis, an oversupply of crude in the market and a potential cooling in China’s growth pointed to “economic signs that are not rosy.” The Organization of the Petroleum Exporting Countries said world economic growth this year was revised up to 3.8 percent in June from the previous month’s 3.5 percent forecast. The gain was driven mainly by improved performance in the Japanese economy which it forecast to grow by 2.7 percent this year compared to last month’s 1.5 percent projection.
“While the global economy seems to be enjoying solid momentum in the first half (of 2010), concerns about growth in the second half remain due to euro-zone sovereign debt problem, the ability of China to avoid overheating and the still high unemployment” in industrialized nations, OPEC said in its June Oil Market Report.
The 12-nation group that supplies about 35 percent of the world’s oil has seen the price of its member states’ chief export drop from nearly $87 earlier in May to around $70 per barrel this month. The slide came as concerns mounted about a spillover from Greece’s debt crunch that would undercut the fragile economic recovery taking place in the world and, by extension, oil demand.
“With half of the year already passed, economic signs are not that rosy,” the report said, adding however that increasing world economic growth rates offered hope that oil demand would be supported.
For more than a year, the group has refrained from changing its output quotas to boost prices. Saudi Arabia and others have said oil at between $70-80 per barrel is fair for both producers and consumers.
The producer bloc is slated to meet in October to discuss whether to revise its output ceiling, but several ministers have indicated that a cut was unlikely given that members were already producing far more than their quotas.
It said given the current oversupply in the market, demand for OPEC crude was revised down to 28.8 million barrels per day — a drop of 70,000 barrels per day from May forecasts.
“This would leave no room for additional crude supplies in the market,” OPEC said, even as it predicted non-OPEC production would climb this year by 640,000 barrels per day.
OPEC lowered its world oil demand growth forecast by 10,000 barrels per day, at 940,000 barrels per day. That put 2010 world demand at 85.37 million barrels per day or 1.12 percent more than the previous year.