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World Oil Demand

OPEC Monthly Oil Market Report – October 2017

41

Saudi Arabia

In

Saudi Arabia

, August 2017 oil demand returned to a declining trend as oil demand dipped steeply by

0.26 mb/d, or 9% y-o-y, to reach approximately 2.67 mb/d. On a cumulative basis, from January to August oil

demand growth in the Kingdom weakened by around 70 tb/d equating to 3.0% y-o-y.

Most products saw negative growth during August with the exception of the “other product” categories.

Diesel oil declined by a considerable 0.19 mb/d equating to 24% y-o-y amid less-than-expected consumption

in the construction and transportation sectors. Fuel oil declined, only for the second time in 2017, shedding

around 0.14 mb/d y-o-y. Historic high baseline levels of consumption in August 2016 and the easing of

power generation demand resulted in declining growth for fuel oil. Moreover, direct crude burning declined by

80 tb/d in August, equating to 11% y-o-y, caused by substitution with natural gas particularly after the start-

up of the Wasit gas plant and improving efficiency in various sectors. Direct crude for burning has dropped

y-o-y continuously since the middle of last year. Total demand for direct crude for the purpose of burning was

0.66 mb/d in August. LPG and jet/kerosene also weakened as they dropped by 33% and 14% y-o-y,

respectively.

Iraq

Similarly, oil demand figures for August 2017 in

Iraq

showed declining oil requirements by more than

0.1 mb/d, or 15% y-o-y, despite mixed product performance. While LPG, gasoline and middle distillates

showed increases, naphtha, fuel oil and the “other product” category declined, with most of those declines

appearing in the “other product” category.

Oil requirements were flat in

Kuwait

and

Iran

during the month of August 2017 and rose in the

UAE

and

Qatar

by 15 tb/d and 20 tb/d y-o-y, respectively.

Expectations for the region for the remainder of

2017

appear skewed to the downside as the high level of

substitution as well as possible subsidy reduction in Saudi Arabia should subdue demand growth. In

2018

, oil

demand growth is expected to be at similar levels to the current year as the introduction of substitution

programmes, efficiency gains and economic reforms are assumed to moderate oil demand growth in the

short term.

For both 2017 and 2018, oil demand growth in the

Middle East

is expected to rise by 0.1 mb/d y-o-y,

respectively.

Latin America

Graph 4 - 13: Latin American oil demand,

y-o-y change

Graph 4 - 14: Brazilian gasoline demand,

y-o-y change

-400

-200

0

200

400

600

-400

-200

0

200

400

600

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

tb/d

tb/d

Historical range

Historical average

2016

2017

Sources: Joint Organisations Data Initiative, national and

OPEC Secretariat.

0

20

40

60

80

100

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

tb/d

Sources: Agencia Nacional do Petroleo, Gas e Biocombustiveis

of Brazil, Joint Organisations Data Initiative and

OPEC Secretariat.