Emerging Markets' Oil Appetite to Exceed U.S. This Year

This year for the first time the collective oil appetite of emerging markets -- many of which don't pay the market price for oil -- will exceed that of the U.S. It is striking stuff, as evidenced by the following figure (click here to enlarge):

Among other points of the piece is that, as a result, while recent recessions have produced double-digit percentage decreases in oil demand, this one will be different. It is, pace my friend economist Jeff Rubin at CIBC, more likely we are headed through $120 oil on our way to $150.

Interesting stuff.

[via Bloomberg]

Comments

[windinmyface2:]

In China, Gas costs 5.34 yuan (76 cents) a liter or 20.5 yuan ($2.90) a gallon. State oil companies are barred from passing on rising crude costs to consumers, instead covering their losses out of profits from their drilling units.

2008 Apr 22 10:47 AM

[windinmyface2:]

Sounds good to me. How can a "RED" country do this, and our government can't?

2008 Apr 22 10:48 AM

[AlexS:]

Our government did that once, back in the 1970s energy crisis. The result was long lines and "station closed" signs. Energy exploration dried up. Some people, many of whom were probably not born back then, would like to try that model again. They can be found in the Obama crowds shouting "hope" and "believe". Unfortunately, they appear not to have been exposed to concepts like "economics".

2008 Apr 22 11:29 AM

[boardroom_j...:]

Alex, there aren't many left that think republicans know how economics works. After all, the result of the Republican Revolution is what you're living in right now.

2008 Apr 22 12:18 PM

[JREwing:]

The oil price has nothing to do with GOP or Dems.

2008 Apr 22 12:24 PM

[AlexS:]

Jimmy, I don't mind the Republican Revolution. My big worry is that Obama wins the Presidency and gets to spend the next four years playing with his new power and our resulting crashing economy.

2008 Apr 22 12:49 PM

[User 181738:]

I agree that oil will only be going up because of supply and demand.
World wide oil production has been in decline since 1999, yet, the demand continues to increase due to developing countries particularly
China and India. Get ready for $200 a barrel by the end of this decade
or sooner. It's coming!

2008 Apr 22 01:05 PM

[Investor612:]

$200 oil? At some point other forms of energy become competitive and that will put a lid on how high it will go.

2008 Apr 22 06:54 PM

[br1756:]

There are no suitable replacements for oil in too many parts of our economy, most notably transportation, which is 95% oil-based. (Presumably the 5% represents electric propulsion -- trains and trolley busses, and perhaps LNG.)

See:

www.eia.doe.gov/pub/oi...

So there is no lid at $200, unless people stop driving, which at some point they will be forced to do. (If not at $200 oil then at $300 oil or $500 oil.)

2008 Apr 22 08:04 PM

[User 181738:]

Unfortunately other forms of energy cannot solve the problem unless there's a plan in place to convert the whole country over.
The government has their head in the sand when they think there is an endless supply of oil in the planet. Something needs to be done on a national level to bring alternative energy online before we are in a crisis situation, and we heading that way quickly.

2008 Apr 22 10:45 PM

[Ames Tiedeman:]

Of course we will see $200 in a couple of years. If the world can only produce 85 to 87 million barrels a day and this kind of growth is occurring, we will have a major inbalance sooner than most realize. China is adding 30,000 cars a month. Look at Mexico, their internal consumption is up and their national oil production dropped 7.8% in Q1.

2008 Apr 23 07:13 AM