Global Oil Demand is Surging But That’s Still Not Enough to Fix the Oil Market
The oil industry just can't seem to snap out of its doldrums this year. Crude remains stubbornly low, which has stalled the industry's attempts at a recovery. However, while weaker prices have been bad for oil producers, they've been great for consumers because it has kept prices for refined products like gasoline down, which is fueling robust demand growth this year. That said, this accelerating demand hasn't been enough to propel the oil market, due in part because shale drillers have unleashed a gusher of new production.
That give and take market was on display this week when the International Energy Agency (IEA) released its monthly commentary. One of the highlights of the report was recent data showing accelerated demand growth. Last quarter, for example, demand grew by 2.3 million barrels per day (Bpd), which is up 2.4% year over year thanks to higher than expected consumption in the U.S. and Europe. That strong showing drove the IEA to ratchet up its 2017 growth forecast once again. It now expects oil demand to grow by an average of 1.6 million Bpd this year, up from its view of a 1.4 million Bpd increase two months ago. That continues the trend of rising demand, which is now well above where it was a few years ago when crude was in the triple digits:
Image source: IEA.
Source: Fool.com
