World Oil Demand
OPEC Monthly Oil Market Report – October 2017
The overall outlook for the remainder of
is now equally balanced between the upside and the downside.
Economic activities are anticipated to be the largest supporter of demand growth as are the performance of
LPG as feedstock to newly commissioned PDH plants and the impact of the Golden Week holidays. The
implementation of measures against air pollution in major cities such as Beijing, Fujian and Chengdu and
substitution by other fuels such as gas are anticipated to dent oil demand growth going forward.
, projections take into account assumptions such as rising demand for transportation and industrial
fuels, slightly lower GDP growth as compared to 2017, a continuation of fuel quality programmes targeting
fewer emissions and the continuation of fuel substitution with natural gas and coal.
Chinese oil demand
is projected to grow by 0.40 mb/d in 2017 and 0.35 mb/d in 2018.
Indian oil demand
declined in August 2017 for the
first time since March 2017 when cash limitations
caused by the demonization policy hindered
consumer spending. The decline was steep in
August at 0.25 mb/d – or around 6% y-o-y
compared to a year earlier, chiefly due to heavy
rains and floods as well as the higher base line of
Slower-than-expected oil demand growth in June
and July had already moderated expectations for
Indian oil demand growth in 2017. These
expectations were exacerbated by August data. On
a cumulative basis, according to data from January
to August, oil demand in India shows a surprise dip
of around 20 tb/d as compared to the same period
a year earlier. The heavy monsoon season, the
introduction of the GST as well as lower consumer
spending in 1Q17 adversely impacted the
anticipated firm oil demand growth for the current
Graph 4 - 9:Indian gasoline demand,
year. As a result, oil demand projections were adjusted lower by 0.1 mb/d in the 3Q17. For August 2017,
total product consumption reached 3.79 mb/d, dropping below the 4 mb/d for the first time in 2017. In terms
of products, diesel oil was the major source of decline, shedding 60 tb/d, or 4% y-o-y. Diesel oil consumption,
which accounts for around 40% of total Indian oil consumption, dropped to 1.55 mb/d in August. The
contraction in demand for diesel oil resulted from moderations in manufacturing activities as floods in many
areas of the country slowed trucking movements and construction work.
Gasoline demand also declined marginally in August for the first time since January 2017, by around 5 tb/d
y-o-y, while total product demand stood at 3.8 mb/d in August. Heavy flooding in Uttar Pradesh, Bihar,
Assam, Maharashtra and Uttarakhand caused the closure of businesses and schools for some days thereby
reducing miles travelled. Conversely, passenger car sales registered positive gains, rising by around 14%
y-o-y with two-wheeler sales continuing their double-digit growth, rising by 15% y-o-y.
Table 4 - 6: Indian oil demand by main products, tb/d
Sources: OPEC Secretariat, and Petroleum Planning and
Analysis Cell of India.
Sources: JODI, Petroleum Planning and Analysis Cell of India and OPEC Secretariat.