Baku, Azerbaijan, Feb.13
By Leman Zeynalova – Trend:
In 2018, world oil demand is foreseen to reach 98.60 million barrels per day (mb/d), representing growth of 1.59 mb/d, according to OPEC’s February Oil Market Report.
This is 60,000 b/d higher than the previous month’s projections and mainly reflecting the positive economic outlook, according to the cartel.
OPEC estimates that the total world oil demand stood at 97.01 mb/d in 2017.
“Demand for OPEC crude in 2017 is estimated to stand at 32.8 mb/d, some 0.6 mb/d higher than the 2016 level. In 2018, demand for OPEC crude is forecast at 32.9 mb/d, slightly higher than the 2017 level,” said the report.
For 2018, the major assumptions accounted for in the oil demand forecast include: a steady rise in global economic activities, which are projected to increase by 3.8 percent year-on-year; transportation fuels – namely gasoline, jet fuel and diesel oil – are anticipated to provide the bulk of growth in 2018, propelled by steady vehicle sales in the US, China and India; and capacity additions as well as expansions in petrochemical sector projects, which are expected to provide support to light distillates requirements, mainly in the US, and to a lesser extent in China, OPEC experts believe.
Conversely, oil demand is assumed to be limited by a number of factors, namely: the level of substitution with other fuels in OECD Americas, Asia Pacific, and the Middle East; a steady increase in efficiency gains, and a reduction in subsidies, which are anticipated to reduce oil demand in the Middle East, but mitigated by higher household income, according to the report.
“Finally, the degree of digitalization and technological development in various sectors is also expected to relatively cap oil demand growth in 2018,” the cartel experts believe.
Recently, healthy and steady economic development in major global oil demand centers was the key driver behind strong oil demand growth. This close linkage between economic growth and oil demand is foreseen to continue, at least for the short term, according to OPEC.
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