Oil Consumption Growth Slow

The latest figures from the International Energy Agency show that last year's growth of oil consumption was pretty modest. Here's a chart comparing oil demand with the IMF's estimates of world GDP growth:

Slower growth of oil consumption in 2006 and 2007, without a comparable drop in GDP growth, shows conservation effects. A little economic slowdown, plus more time for the price elasticity to work its magic, and oil demand will be unchanged from one year to the next. Add to that the large number of megaprojects that will be coming on line and I'm pretty optimistic about oil prices (though I confess I've been wrong on this subject in the past).

Comments

[erniem:]

No doubt there will be a drop in prices. And a rise. All the low hanging fruit has been picked in the oil fields, the new projects are very very expensive, increased world population and increased consumption in India and China are a given.

2008 Feb 15 09:19 AM

[Worldtravel...:]

Quote: " Add to that the large number of megaprojects that will be coming on line and I'm pretty optimistic about oil prices (though I confess I've been wrong on this subject in the past)."

Depending on one's point of view, you could take that "optimistic" statement two ways. I what exactly is meant by that?

2008 Feb 16 08:45 AM

[Gigem77:]

World demand for oil is growing every year. It is the rate of growth that has slowed. This is the same problem with semantics that we have with government when they say that they "cut" the budget and mean that they cut the rate of growth from 8% to 5%. The world is burning 85+ million barrels per day. Are we finding oil at that rate? The price has risen from 12 to 95 bucks a barrel over the past 10 years with few signs of elasticity of demand. Supply from "megaprojects" takes several years to begin to come to market.

2008 Feb 16 06:07 PM

[Ronmac:]

Yeah, just where is all of the new oil going to come from? How about field depletion? Are we even finding enough to offset that?

2008 Feb 17 12:29 AM