AlleyCat
2024-05-13 21:40:49 UTC
Never Mind Those EVs - Oil Demand Keeps Growing
Fuel Efficiency And Green Initiatives Haven't Slaked The World's Thirst For
Crude
Like clockwork, the commodities market worries in May about the strength of oil
demand heading into the northern hemisphere summer holiday. Nervousness about
the seasonal pickup in oil consumption abounds. It happened in 2023, and it's
happening again this year. But as before, traders' concerns are misplaced: Oil
demand growth is doing just fine.
The anxiety is reflected in the price of Brent crude, the global oil benchmark,
which has dropped to less than $85 a barrel in recent days, down from about $90
a barrel in April. With the OPEC+ oil cartel meeting on June 1 to decide
whether to prolong production cuts, the status of global demand matters. The
group should look beyond the current noise and see that consumption remains
firm.
Admittedly, there are pockets of demand weakness. The middle distillates fuel
segment, which includes diesel and heating oil, have seen soft consumption so
far this year. But that's largely due to a warm winter in the northern
hemisphere, which reduced heating needs, rather than underlying economic
malaise.
In the diesel market, the biggest problem isn't demand, but supply: Renewable
diesel and bio-diesel are taking market share more rapidly than expected, in
the process magnifying the diesel glut. In February, the last month with
monthly data available, biodiesel and renewable diesel accounted for about 8.5%
of total US diesel consumption. In 2020, the market share of both was under 1%.
Overlooked, however, are the pockets of demand strength.
Gasoline consumption is rising beyond what many had anticipated even as
electric vehicles become more popular. Notwithstanding the increase in EV
sales, there are now more cars than ever powered by internal-combustion
engines. And pump prices are at levels that don't discourage consumption,
particularly in emerging markets.
Only a year ago, the International Energy Agency ventured that global gasoline
demand peaked in 2019, and EVs meant that consumption would never return to
pre-pandemic levels. Now we know better: Already last year, gasoline demand
surpassed that, and in 2024 it's growing even further.
Jet fuel is the other refined product doing better than expected despite the
widespread adoption of more fuel-efficient planes. For the last 18 months or
so, those efficiency gains put a brake on jet-fuel demand. But now the number
of flights and, importantly, the quantity of miles flown have increased so much
above 2019 levels as intercontinental travel resurges that jet-fuel consumption
is for the first time matching seasonal pre-Covid-19 levels. In early May, the
number of flights was 5% above the same time of 2019, while the number of
flight-miles was nearly 10% higher, according to Airportia, a data provider.
When you add it all up, oil demand growth is still looking healthy for 2024.
Granted, it won't advance as much as the uber-bullish forecasters had hoped. In
particular, OPEC's own prediction of a 2.2 million-barrel-a-day gain looks
farfetched - if not absurd. Yet, it's on track to reach the far more reasonable
1.2 million gain anticipated by the International Energy Agency, setting a
record of more than 103 million barrels a day.
[...]
https://www.bloomberg.com/opinion/articles/2024-05-13/are-evs-having-an-impact-
on-climate-change-oil-demand-keeps-growing
=====
May:
Record May Cold In Japan
"Patagonia Is Absolutely Buried"
Rare Snow Blankets Chile's Capital
Snowbird, Utah Surpasses 600 Inches
Alaska's Near-Record Snow Season Also Means "Big Fire Danger"
Australia Shivers
Spring Snow Continues To Build On Europe's Mountains As Winter's Cold Lingers
Mongolia's Snowiest Winter Since 1975
Much Of Russia Returned To Winter
Heavy Snow Hits Argentina A Month Early
Spain Chills
"Best May Powder Days In Memory" At Palisades
Cold Antarctic Coast
Heavy May Snow Hits the Sierra Nevada
Concordia Below -70C (-94F) for 10-Days
Cooling In The Tropical Pacific
Vostok's Coldest April Since 1999
Global Temperature Expected To Fall In May
Tonga Eruption Responsible For Toasty 2023 (nyah nyah!)
Missing Spring In Jackson, WY
Cool Summer Forecast For Much Of The Northern Hemisphere
Record May Cold Sweeps India
Rare April Cold Hits Antarctica (-112F)
Heavy Spring Snow Traps 1,000 Vehicles In Northern India
Wild Swings In New Jersey
The Wind Didn't Blow As Hard In 2023
Fuel Efficiency And Green Initiatives Haven't Slaked The World's Thirst For
Crude
Like clockwork, the commodities market worries in May about the strength of oil
demand heading into the northern hemisphere summer holiday. Nervousness about
the seasonal pickup in oil consumption abounds. It happened in 2023, and it's
happening again this year. But as before, traders' concerns are misplaced: Oil
demand growth is doing just fine.
The anxiety is reflected in the price of Brent crude, the global oil benchmark,
which has dropped to less than $85 a barrel in recent days, down from about $90
a barrel in April. With the OPEC+ oil cartel meeting on June 1 to decide
whether to prolong production cuts, the status of global demand matters. The
group should look beyond the current noise and see that consumption remains
firm.
Admittedly, there are pockets of demand weakness. The middle distillates fuel
segment, which includes diesel and heating oil, have seen soft consumption so
far this year. But that's largely due to a warm winter in the northern
hemisphere, which reduced heating needs, rather than underlying economic
malaise.
In the diesel market, the biggest problem isn't demand, but supply: Renewable
diesel and bio-diesel are taking market share more rapidly than expected, in
the process magnifying the diesel glut. In February, the last month with
monthly data available, biodiesel and renewable diesel accounted for about 8.5%
of total US diesel consumption. In 2020, the market share of both was under 1%.
Overlooked, however, are the pockets of demand strength.
Gasoline consumption is rising beyond what many had anticipated even as
electric vehicles become more popular. Notwithstanding the increase in EV
sales, there are now more cars than ever powered by internal-combustion
engines. And pump prices are at levels that don't discourage consumption,
particularly in emerging markets.
Only a year ago, the International Energy Agency ventured that global gasoline
demand peaked in 2019, and EVs meant that consumption would never return to
pre-pandemic levels. Now we know better: Already last year, gasoline demand
surpassed that, and in 2024 it's growing even further.
Jet fuel is the other refined product doing better than expected despite the
widespread adoption of more fuel-efficient planes. For the last 18 months or
so, those efficiency gains put a brake on jet-fuel demand. But now the number
of flights and, importantly, the quantity of miles flown have increased so much
above 2019 levels as intercontinental travel resurges that jet-fuel consumption
is for the first time matching seasonal pre-Covid-19 levels. In early May, the
number of flights was 5% above the same time of 2019, while the number of
flight-miles was nearly 10% higher, according to Airportia, a data provider.
When you add it all up, oil demand growth is still looking healthy for 2024.
Granted, it won't advance as much as the uber-bullish forecasters had hoped. In
particular, OPEC's own prediction of a 2.2 million-barrel-a-day gain looks
farfetched - if not absurd. Yet, it's on track to reach the far more reasonable
1.2 million gain anticipated by the International Energy Agency, setting a
record of more than 103 million barrels a day.
[...]
https://www.bloomberg.com/opinion/articles/2024-05-13/are-evs-having-an-impact-
on-climate-change-oil-demand-keeps-growing
=====
May:
Record May Cold In Japan
"Patagonia Is Absolutely Buried"
Rare Snow Blankets Chile's Capital
Snowbird, Utah Surpasses 600 Inches
Alaska's Near-Record Snow Season Also Means "Big Fire Danger"
Australia Shivers
Spring Snow Continues To Build On Europe's Mountains As Winter's Cold Lingers
Mongolia's Snowiest Winter Since 1975
Much Of Russia Returned To Winter
Heavy Snow Hits Argentina A Month Early
Spain Chills
"Best May Powder Days In Memory" At Palisades
Cold Antarctic Coast
Heavy May Snow Hits the Sierra Nevada
Concordia Below -70C (-94F) for 10-Days
Cooling In The Tropical Pacific
Vostok's Coldest April Since 1999
Global Temperature Expected To Fall In May
Tonga Eruption Responsible For Toasty 2023 (nyah nyah!)
Missing Spring In Jackson, WY
Cool Summer Forecast For Much Of The Northern Hemisphere
Record May Cold Sweeps India
Rare April Cold Hits Antarctica (-112F)
Heavy Spring Snow Traps 1,000 Vehicles In Northern India
Wild Swings In New Jersey
The Wind Didn't Blow As Hard In 2023