One of the recurring peculiarities of oil complex data as reported by the EIA was how, during a time of an unprecedented crude glut by OPEC and pronounced economic weakness in the US, was overall US demand of various petrochemical products as strong as the DOE reported on a weekly basis. To be sure, the alleged increase in demand was one of the major catalysts that prompted rising oil prices together with relentless jawboning by OPEC members about a “production freeze” that would never materialize, in turn spurring not one but two record short squeeze across the commodity complex.
Source: The Truth Emerges: EIA Admits It “Overestimated” Crude, Gasoline Demand In The First Half By 16% | Zero Hedge
Oil prices may have risen since the start of the month, but analysts believe the lackluster outlook for global demand – amid a shaky global growth environment and stubborn oversupply – should be more of a concern for investors.”One consideration (in the near-term) that we think is going to be more relevant is on the demand side, rather than supply,” Marc Kofler, research analyst at Jefferies, told CNBC Monday.”We are coming into what we expect to be a heavy refinery maintenance season in the OECD (Organization for Economic Co-operation and Development) and we would expect that to limit the amount of crude oil that you’re seeing being bought by these refineries and that could actually have some near-term negative momentum around the oil price,” he added.
Source: Oil demand outlook should worry investors, analysts warn
July was the worst month for crude oil in a year. The usual seasonal boost in demand that could be helping prices is lackluster right now, Barclays’ Michael Cohen and his team wrote in a note on Monday. This postpones any chances for the market to balance out, he said.Summer is usually the best season of the year for excess inventories in both crude and refined products like gasoline to drop. After a few busy months of road trips, the oil market enters a so-called shoulder season, and refineries wind down to prepare for higher heating-oil demand.US stockpiles are at the highest level for this time of year in at least two decades, according to Bloomberg. And inventories could build up even more during this period.
Source: Oil demand growth remains lackluster – Business Insider
The doomsday crude market is a blessing for India’s Oil Minister Dharmendra Pradhan.The nation of 1.3 billion people is guzzling ever more oil as the fastest economic expansion among major economies spurs increased use of trucks, cars and motorbikes. The slump in crude is giving Pradhan, 47, the chance to drive hard bargains for stakes in foreign fields as well as prod India’s state-run energy companies to step up exploration while industry costs are low. The $2 trillion economy gets about 80 percent of its oil and gas from overseas. Local production has been declining as some fields mature. Pradhan took office just over two years ago, when Prime Minister Narendra Modi swept to power in a landslide. Brent crude has tumbled roughly 60 percent since then.“This is the best ever window available to India,” said Swagat Bam, an adviser at the New Delhi-based Observer Research Foundation. “Valuations of global assets are low and exploration costs have crashed. India must do all it takes to reverse its fortunes in the next few years.”
Source: Doomsday Luck for Man at Center of Global Oil Demand Growth – Bloomberg
Oil consumption in Saudi Arabia, the world’s biggest crude exporter, is expanding at the slowest pace in at least six years as low energy prices hurt economic growth.The kingdom’s demand for oil increased by an average of 24,000 barrels a day in the first five months of 2016, the slowest growth rate for that period since at least 2010, the first year for which data are available from the Joint Organisations Data Initiative in Riyadh. The International Energy Agency is now looking for a drop in demand in Saudi Arabia for all of 2016, after forecasting an increase earlier this year.Consumption of gasoline, kerosene and other refined products contracted this year, slipping by 22,000 barrels a day in the first decline since at least 2002, when JODI began tracking data. JODI monthly data on total oil demand, which includes crude burned to generate electricity, dates back to 2009. Demand has been crimped after governments in the oil-rich region cut or removed fuel subsidies, BMI Research said in a July 27 report.
Source: Saudi Arabia Oil Demand Growth at 6-Year Low on Slowdown – Bloomberg
Global oil prices fell below $40 a barrel on Monday, after Reuters’ new survey tallying oil output from OPEC countries showed outputs for the 13-member bloc at record highs when compared to figures in recent history.The overall increase in global crude output has dragged oil prices down 20 percent since they broke above $50 in June.Friday’s survey found that Iraq increased oil output in July, as the national army made gains against the Islamic State’s (ISIS) oil production and supply network.The former Gulf country’s oil officials confirmed on Monday an increase in crude production from 3.175 million barrels in June to 3.2 million barrels in July.Nigeria – a country that has been inundated by separatist attacks on oil facilities by the Niger Delta Avengers and related groups – upped outputs despite militant efforts.To meet an uptick in seasonal demand for oil, Saudi Arabia – OPEC’s de facto leader and top exporter – kept production levels close to record highs in order to limit Iran while it attempts to regain lost market share.The Wall Street Journal reported that Saudi Aramco had also cut its price per barrel to Asia by sizable margins over the weekend.The Iranian oil minister confirmed the oil glut in a statement to Iranian state television on Monday, but insisted that the balance between supply and demand would be restored in due time.American oil drillers added 44 oil rigs last month – the highest amount in any month since April 2014 – according to Baker Hughes latest rig count.OPEC’s key rival, Russia, has been increasing supplies for three straight months as well.
Source: Oil Prices Fall Below $40 As OPEC Ramps Up Output | OilPrice.com
The U.S. Energy Information Administration cut its forecast for U.S. oil demand growth in 2016, and increased its demand growth forecast for 2017, according to a monthly outlook issued on Tuesday.U.S. oil demand is expected to grow 160,000 barrels per day in 2016, compared with previous expectations for 220,000 bpd, according to the department. Demand will grow 120,000 bpd in 2017, compared with 60,000 bpd previously.U.S. petroleum and liquid fuel 16consumption will still reach an average of 19.68 million bpd in 2017, in line with previous estimates, said the U.S. Energy Department’s statistical wing.”EIA expects U.S. drivers will see gasoline prices gradually decline from their June level through the end of this year,” EIA Administrator Adam Sieminski said. “A combination of lower crude oil prices, high gasoline production, and rising gasoline inventories pushed gasoline prices down this year.”The price decline will encourage driving, accounting for some demand growth this year, even if it is more moderate than the growth previously expected.Globally, the agency cut its 2016 world demand forecast by 10,000 bpd to a 1.44 million bpd year-on-year increase, and raised its 2017 world demand growth forecast by 20,000 bpd to a 1.49 million bpd rise.”India and China are expected to account for much of the growth in global oil consumption this year and in 2017,” Sieminski said.
Source: UPDATE 1-EIA cuts 2016 U.S. oil demand growth forecast | Reuters
Global coal consumption dropped the most on record last year as the U.S. and other major economies started turning away from the most polluting fossil fuel, according to BP Plc’s annual review of energy trends.As the world begins to tackle the goals of last year’s Paris climate agreement, news of coal’s retreat was tempered by the fact that oil increased its share of energy consumption as low prices spurred demand in both industrialized and developing countries.“Oil grew exceptionally strong because when price falls, demand increases,” Spencer Dale, BP’s chief economist, said in London as the company presented its Statistical Review. “The big casualty last year was coal. We are seeing a shift in the fuel mix away from coal, driven a lot by environment issues.”Coal use fell 1.8 percent in 2015, the largest decline in data going back to the mid-1960s, BP said. The fuel accounted for 29.2 percent of consumption, the lowest since 2005, while oil’s share rose for the first time since 1999.A slump in crude prices over the past two years has made gasoline and diesel more affordable, spurring consumers to drive more. Oil increased its market share to about a third last year as demand rose at almost double the pace of 2014, BP said.
Source: World Starts to Turn From Coal as Cheap Oil Gains Market Share – Bloomberg
Global demand for energy grew relatively slowly in 2015 by only 1% similar to the growth rate in 2014 but far slower than the growth rate seen over the previous 10 years reflecting continued weakness in the global economy and lower growth in Chinese energy consumption. Demand strength was seen in renewables, oil and natural gas while coal saw its largest demand fall on record. The report is attached and can be found at: http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html
BP Statistical Review of World Energy 2016 full report