Non-OECD demand to exceed OECD in ’13

The International Energy Agency is now predicting that in 2013 oil demand from developing countries will for the first time overtake that of developed countries in the Organization of Economic Cooperation and Development. The crossover in demand will likely take place in the second quarter of 2013, the agency said in its July Oil Market Report.

For some time oil demand has been climbing steadily in developing countries, especially in China, as the economies of these countries grow and there is an increasing demand for liquid fuels, particularly for transportation. At the same time, demand in the developed world has slackened as developing countries cope with the aftermath of the 2008 financial crisis and the subsequent economic recession.

In the United States, characterized in the report as the largest global consumer of oil, demand for oil products has continued to decline in 2012. The sharpest reductions were seen in residual fuel oil and naphtha demand, with gasoline demand dropping less as the mileage travelled by U.S. car drivers moves towards some lower limit, the agency said.

In China, characterized as the largest single source of oil demand growth, oil consumption has eased back so far in 2012 but demand growth is expected to resume in the second half of the year, the agency said.

Key uncertainties in predicting future world oil demand include the ramifications of the European debt situation and the problems in the European Monetary Union, and continuing concerns about the momentum of both the U.S. and the Chinese economies, the report says.

—Alan Bailey