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World Oil Demand

OPEC Monthly Oil Market Report – November 2017

33

The overall risks for the development of US oil demand for the remaining part of 2017 and 2018 can be seen

as skewed to the upside, mainly as result of strong anticipated economic growth and the support of the low

oil price environment; nevertheless there are also factors that may push oil demand to the downside with fuel

substitution and developments in vehicle efficiencies being the principal ones.

Mexico

Mexico’s oil demand

shrank in September 2017 by 0.04 mb/d, or 2.0%, y-o-y, representing the tenth-

monthly decline in a row, and thus painting an overall bearish year-to-date picture during 2017. The bulk of

oil demand losses during September 2017 originated in gas/diesel oil and gasoline, despite the low oil price

environment. These have been partly offset by rising requirements for LPG, jet/kerosene and residual fuel

oil. The risks for 2017 and 2018 Mexican oil demand remain skewed to the downside, despite the projected

positive development of the overall economy, to a large extent as a result of anticipated fuel substitution.

Canada

In

Canada

, August 2017 saw a decline y-o-y. Small gains in naphtha, gasoline, gas/diesel oil and residual

fuel oil have been more than offset by declines in LPG and jet/kerosene, with LPG being affected by fuel

substitution. The prospects for Canadian oil demand in 2017 and 2018 are slightly positive as a result of a

growing economy, while existing downside risks concern vehicle efficiencies and fuel substitution.

In 2017,

OECD Americas oil demand

is expected to grow by 0.24 mb/d, as compared to 2016. 2018 OECD

Americas’ oil demand is projected to increase by slightly less compared with the current year, growing by

0.20 mb/d y-o-y.

OECD Europe

August 2017 data showed weak

European oil demand

growth y-o-y, falling slightly and following strong

months of May and June 2017. The majority of the main oil consuming countries in the region, with exception

to Italy, Poland, the Netherlands and Belgium, saw oil demand declines y-o-y. Nevertheless, the implied

year-to-date increase in European oil demand is substantial at 0.2 mb/d y-o-y and is in line with the region’s

strongly increasing economy.

Graph 4 - 3: OECD Europe oil demand,

y-o-y change

Graph 4 - 4: UK diesel oil demand,

y-o-y change

The growth in oil demand is dominated by bullish gas/diesel oil and gasoline demand in the road

transportation sector as well as jet/kerosene and naphtha requirements for the aviation and petrochemical

sectors. During August 2017, the positive momentum in auto sales continued to highlight another increase of

more than 5% and with year-to-date growth of almost 5%. According to data from the European Automobile

Manufacturers Association (ACEA), most major auto markets – Italy Spain, France and Germany –

expanded solidly.

-1,200

-800

-400

0

400

800

-1,200

-800

-400

0

400

800

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

tb/d

tb/d

Historical range

Historical average

2016

2017

Sources: National, Joint Organisations Data Initiative and

OPEC Secretariat.

-60

-40

-20

0

20

40

60

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

tb/d

Sources: Joint Organisations Data Initiative, UK Department of

Energy Climate and Change and OPEC Secretariat.