Oil Demand Alive and Well | Russell T. Rudy Energy LLC
Industry observers have focused on oil production and oversupply since late 2015, but not as much attention has been devoted to demand recently. Admittedly, a downturn in manufacturing and financial turmoil dampened demand in the developed economies. Annual demand growth did fall from over 2% to 1.2% in the fourth quarter of last year. A global glut and falling demand sent prices to alarming levels. However, “World Oil” reports that international banker, Credit Suisse, contends that the predicted demise of demand has been greatly exaggerated.
Jan Stuart, Global Energy Economist at Credit Suisse, sees global demand growth as starting to accelerate. He thinks that recent softness was due to a warm winter, less activity in the extractive industries, and economic malaise in Russia and Brazil.
Stuart observes, “Oil demand growth is alive and well. We think that with hindsight this winter will look like a dip in an otherwise still unfolding fairly strong growth trend that is partly fueled by the ongoing economic recovery in North America and Europe and longer standing trends across key emerging market economies.”
He goes on to say that he does not see a global recession as imminent, and cites oil demand growth this year in China and the U. S. as proof. Demand in Brazil is also starting to show signs of life, and strong growth is emerging in India and South Korea.
Industrial demand for energy is stagnant, but the demand for passenger vehicle fuel is strong, largely due to the growth of the middle class in emerging economies. Stuart sees this trend continuing over the course of this year and keeping energy demand alive and well.
To read the article in its entirety, please go to http://www.worldoil.com/news/2016/3/28/the-death-of-oil-demand-has-been-greatly-exaggerated-credit-suisse .
Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide. Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.
