World Oil Demand
OPEC Monthly Oil Market Report – August 2017
The improvement of the economic conditions across the region, alongside positive vehicle sales, have
allowed OECD Europe oil demand data to be revised upward once more. As such an upward adjustment of
40 tb/d in 2Q17 was considered in the 2017 data. For 2018, oil demand projections were revised higher by
10 tb/d. This mainly reflects Europe’s positive economic outlook compared to last month’s report.
The flourishing petrochemical industry in the OECD Asia Pacific, notably in South Korea, allowed for a
positive adjustment to 2Q17 oil demand growth of 20 tb/d.
Graph 4 - 1: OECD Americas oil demand, y-o-y
Graph 4 - 2: US gasoline demand, y-o-y change
monthly data for May 2017 implied a strong increase in oil demand of around 0.8 mb/d y-o-y.
This is the largest monthly growth in around two years and is in line with general expectations for the
country’s economy. Gains in oil usage have been substantial, but mainly in the transportation and industrial
sectors. Motor gasoline requirements in May saw their strongest monthly growth in 2017, rising solidly by
more than 0.1 mb/d helped by the continuing support of the relatively lower oil price environment, positive
economic growth and despite ongoing gains in vehicle efficiencies. Growth in jet kerosene demand was
similarly strong in May, expanding by around 0.1 mb/d y-o-y. This is the result of increased travelling
activities during the start of the regular holiday season. Distillates demand in May also increased sharply, by
more than 0.2 mb/d y-o-y, with the bulk of gains registered in the transportation sector. Growth in industrial
diesel also showed growth however to lesser degree. Demand for LPG was also seen to expand y-o-y,
notably for the petrochemical sector. Furthermore, residual fuel oil requirements also increased in line with
the improving industrial sector and the low historical oil consumption baseline.
With available data for seven months in 2017 – monthly data until May and preliminary weekly data for June
and July – US oil demand is shown to grow strongly by around 0.5 mb/d. The bulk of the growth is captured
by the lighter and middle part of the barrel; LPG and distillates, gas diesel oil and jet kerosene for the
industrial and transportation sectors. Gasoline demand to date has been surprisingly weak, mainly as a
result of a decline in 1Q17. US oil demand in the short term is expected to be strongly determined – for the
remainder of 2017 and 2018 – by distillates usage and gasoline in the road transportation sector and, hence,
indirectly by fuel price levels. In addition, healthy economic activities are expected to support demand for
industrial and construction fuels. Thus, the overall implied positive future development of US oil demand has
skewed further to the upside since last month. Upside risks are derived in the projected growth of the
economy and oil usage in the transportation and industrial sectors, while fuel substitution and vehicle
efficiencies are the main downside risks.
Sources: National, Joint Organisations Data Initiative and
Source: US Energy Information Administration.