Some of the recent rise in oil prices is due to the traditional drivers: supply disruptions and a weaker dollar. But good old-fashioned global demand is a huge part of this story.
Emerging markets are a material part of that demand equation. Although consumption of oil in the developed world has increased over the last few quarters, non-developed buying in the third quarter helped push total global demand up 3.6% over the last 12 months to a record 88.5 million barrels a day.
In 2011, expect demand to edge even higher into record territory, possibly to a level of 90 million barrels a day.
Yes, China is a major factor in this, and so is India. Between them, these two members of the BRIC are growing their demand for oil at a spectacular rate -- 6.5% and 9.8%, respectively.
But even the Middle East is stepping up as a noteworthy contributor to global demand growth, with demand throughout the region expanding by 295,000 barrels a day, or 4% on a year-over-year basis.
Meanwhile, as economies in the developed world kick in, expect demand from the OECD countries to pick up some time in 2012.
And consumers are not the only ones looking for exposure to crude oil. Sinopec (NYSE:SNP) is pushing into Argentina. The prospect of Falklands oil is renewing tension between the U.K. and Argentina. And even producers with plenty of reserves like Lukoil (OTCPK:LUKOY) are beyond Russia.
Bottom line: With oil already at $89 a barrel, the integrated majors -- the ExxonMobils (NYSE:XOM) of the world -- are a great way to play, but refiners and drillers have great prospects. And for exposure to the commodity itself, USO.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.