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World Oil Demand

36

OPEC Monthly Oil Market Report – September 2017

In

Other Asia

, oil demand growth was adjusted lower (by 0.10 mb/d in 1Q17 and 30 tb/d in 3Q17), mainly

reflecting slower-than-expected oil demand developments following the demonetization policy in India.

Latin American growth

was also revised slightly lower (by 7 tb/d in 2Q17) due to slower economic

momentum denting oil demand.

In

China

, upward revisions (by 20 tb/d in 2Q17, 70 tb/d in 3Q17 and 40 tb/d in 4Q17) stemmed from better-

than-expected demand in the petrochemical and transportation sectors of the country. The historical baseline

for 2016 was also adjusted higher (by +0.28 mb/d for the full year) to account for the most up-to-date data.

For 2018, oil demand growth was adjusted higher (by 35 tb/d for the full year) from the previous month’s

projection, mainly to reflect the expected firm expansions in the petrochemical and transportation sectors.

Other Asia

Graph 4 - 7: Other Asia oil demand, y-o-y change

Graph 4 - 8: Indian gasoline demand,

y-o-y change

India

India’s

oil demand

continued to increase at a slower pace than in 2Q17. July registered an increase of

around 43 tb/d, or 1.1%, y-o-y, with total product demand slightly above 4 mb/d. Looking at mixed product

performance, weakness in ‘other product’ categories negatively affected the overall oil demand growth

picture as the Goods and Services Tax (GST) caused uncertainties in the manufacturing sector lowering

demand for petcoke and lubricants, while demand growth for diesel, gasoline and LPG rose at various

magnitudes.

Diesel oil demand recorded the greatest growth in July, when products registered an increase of about

0.13 tb/d, or 9%, y-o-y leading to total consumption of 1.64 mb/d. Improved overall economic activity,

ongoing infrastructure projects, especially road construction, as well as the economic viability of public

transport and diesel-driven vehicles as a result of lower fuel costs have positively affected diesel oil

consumption. Gasoline consumption increased by 61 tb/d, equating to 12% y-o-y in July. The increase in

gasoline demand growth is largely attributed to the ongoing increase in domestic passenger vehicles sales,

which expanded by around 15% y-o-y in July. Growth in two-wheeler sales was also higher at 14% y-o-y;

61% of India’s gasoline consumption is attributed to two-wheeler growth. LPG grew solidly for the seventh

consecutive month, higher by 75 tb/d, or 13%, y-o-y, with total consumption at around 0.7 mb/d. LPG

demand continues to be led by the residential sector, as ongoing projects to provide more LPG connections

to households are commissioned.

A decrease in fuel oil consumption of 31 tb/d, or around 10% y-o-y, is a result of declining consumption in the

steel and agriculture sectors, as well as substitution programmes favouring natural gas.

0

200

400

600

800

1,000

0

200

400

600

800

1,000

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.

-40

-20

0

20

40

60

80

100

120

140

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

tb/d

Sources: OPEC Secretariat, and Petroleum Planning and

Analysis Cell of India.