In 2014, world oil demand growth was left unchanged from last month’s report at 0.96 mb/d, averaging 91.32 mb/d. In 2015, world oil demand is anticipated grow by 1.18 mb/d from 2014, unchanged from last month’s projections. Total oil consumption in 2015 is anticipated to be around 92.50 mb/d.

OECD Americas
US oil demand was bullish in March 2015, recording the highest monthly y-o-y growth since December 2013, at 0.7 mb/d or 3.9%. Approximately 50% of the recorded growth originated in the road transportation sector, especially with regard to gasoline. This was in line with a booming auto market sentiment and low fuel prices, while strong gains have been observed in jet fuel.

The first quarter has proven to be a strong one for US oil demand, with overall growth of 0.5 mb/d, as compared to the same quarter of last year. Gasoline has accounted for the lion’s share of that growth. Preliminary April and May 2015 data, which is based on weekly figures, implies a continuation of the current positive trend, with transportation fuels accounting for the bulk of these increases. US oil demand growth in the rest of 2015 depends on several factors, such as the economy, retail prices and the degree of substitution to other commodities.

Risks, however, remain skewed to the upside, compared to last month’s publication, with the lower price environment playing a role in pushing up demand for transportation fuels. Some additional features to highlight are the dominance of sport utility vehicles (SUVs) and pick-up trucks in the latest new car sales in the country, with May 2015 being the strongest month in auto sales in the last decade.

In Mexico, April 2015 was another disappointing month for oil demand and was dominated by a substantial decrease in demand for residual fuel oil. This was partly offset by slight increases in demand for all other petroleum product categories. The latest March 2014 Canadian data showed overall declines in oil demand. Declines have been present in all main product categories, particularly for gasoline and gas/diesel oil. Projections for 2015 Canadian oil demand remain unchanged from those reported last month.

In 2014, OECD Americas oil demand grew by 0.08 mb/d compared with 2013. OECD Americas 2015 oil demand is projected to grow once more by 0.22 mb/d compared with
2014.

OECD Europe
European oil demand continues to appear strong in the first four months of 2015, particularly in the 1Q. The reasons behind these positive developments are the improving economy in large parts of the continent, colder weather, a low historical baseline for oil usage during the last three years and, lastly, lower fuel oil prices in the road transportation sector in a large number of countries across the region. Total oil demand for the ‘Big Four’ in April 2015 indicates a strong increase of around 0.15 mb/d y-o-y.

Gains in LPG and gasoil have largely dominated the overall oil increase, while gasoline and fuel oil remained flat y-o-y compared with the same period last year. Furthermore, falling demand for other petroleum products partly offset overall gains. In addition, declines in oil demand for most of the countries with debt issues have already switched to the positive.

The European oil demand outlook remains positive, mainly as a result of improving industrial production, and an auto market that is positively growing. It showed gains in April 2015 of around 7% y-o-y and on a monthly basis has been growing continuously since August 2013. The downside risks continue to be of financial nature: unsolved debt issues in a number of countries in the region and austerity measures, in combination with high taxes on oil usage, especially in the transportation sector. The general expectations for the region’s oil demand during 2015 have once again improved since last month’s projections and are largely connected to developments in the economy.

In 2014, European oil demand shrank by 0.18 mb/d, while oil demand in 2015 is projected to slightly decrease by 0.01 mb/d.

OECD Asia Pacific
April 2015 Japanese oil demand increased solidly 4.4% y-o-y for the first time since March 2014, with rising requirements in all main product categories. The only exception has been residual fuel oil. Moreover, oil requirements in crude and fuel oil for electricity generation fell for another month, as a result of continuing substitution with natural gas and coal.

Japanese oil demand growth has been, however, deeply in the negative during the first three months of the year and rather in line with developments in the economy of the country. The outlook risks for 2015 remain skewed to the downside as a result of the gloomy economy forecasts and the relatively high likelihood that some of the country’s nuclear plants may rejoin operations during the second half of 2015.

In South Korea, March 2015 oil demand was bullish for the second month in a row. Flourishing petrochemical activities, which call for increasing naphtha requirements, have been accompanied by bullish demand for petroleum products in the transportation sector, notably diesel, jet fuel and gasoline. The 2015 outlook for South Korean oil demand during the rest of the year remains positively skewed to the upside. OECD Asia-Pacific oil demand in 2014 shrank by 0.18 mb/d. The downward trend will continue also in 2015 but to a smaller degree by 0.13 mb/d.

Other Asia
In April, oil consumption in India demonstrated exceptional growth, registering more than 0.3 mb/d of growth for the second time in 2015. Total consumption also reached record levels, hitting 4.2 mb/d, with major products of consumption – gasoline and diesel – also recording historically high consumption levels.

Gasoline demand continues its upward trend with demand breaking the 0.51 mb/d level. It rose by 80 tb/d, or around 19% y-o-y, largely supported by passenger car sales data which increased around 18% from the same month last year. In this, two-wheelers drove growth higher, highlighting the sixth consecutive month of growth. Diesel oil demand also surged to reach 1.6 mb/d for the fourth time in history. This was 0.14 mb/d, or more than 9%, higher y-o-y supported by improvements in manufacturing activities in the country as well as less unseasonal rains tempering agricultural demand.

For LPG, demand picked up as compared to last year registering a rise of around 52 tb/d, or around 10% y-o-y, as demand of subsided LPG continues to provide support to consumption. Fuel oil demand growth increased again after a declining trend seen in March 2015, recording the second highest growth in 2015. This growth was a result of higher-than-anticipated consumption in the power sectors as well as the low baseline of 2014. The product increased by around 19 tb/d or close to 10% y-o-y.

In Indonesia, the latest available March 2015 data indicates a similar rise to the month of February 2015 with an increase of around 48 tb/d or around 4% y-o-y. All product categories were in the positive terrain with gasoline, jet/kerosene and LPG leading the growth increase by more than 4% y-o-y each.

Continued positive oil demand momentum in India, along with various other countries in the region such as Indonesia, Thailand, Philippines and Pakistan, indicate an optimistic projection for the region’s consumption levels going forward. Demand is expected to be supported by overall economic improvements and the steady, general economic performance of some countries of the region.

Other Asia’s oil demand increased by 0.21 mb/d in 2014. However, for 2015 oil demand is anticipated to increase by 0.26 mb/d. Latin America In Brazil, April’s oil demand data were on a declining trend. Oil demand fell by 25 tb/d, or slightly more than 1% y-o-y, after modest growth in the previous month. Total oil demand stood at 2.46 mb/d in April. Transportation fuels were contracting with the exception of ethanol. Gasoline declined by more than 8%. Diesel eased compared with the same month last year, falling by around 32 tb/d, in line with slower economic momentum. Jet/kerosene demonstrated a slight decline of around 1% y-o-y. Fuel oil consumption declined the most, with a drop of more than 25 tb/d y-o-y. This can largely be a result of improvements in the hydropower generation system, which was affected
by a reduction in rainfalls in the past few months.

In Argentina, oil demand grew despite economic concerns in the country. However, industrial fuel – that is, diesel oil – was on a declining trend, dropping by around 2% y-o-y, a reflection of slower economic activities. LPG and fuel oil, on the other hand, led most of the demand growth, with LPG rising by more than 8% while fuel oil increased by around 27%.

The latest Ecuadorian data for April 2015 shows a decline in oil requirements, as compared to the same month last year, falling by around 21 tb/d or 8%. LPG was the only product in positive terrain while all other products were in the negative. Gasoline recorded the highest decline, decreasing by around 14 tb/d or around 25% y-o-y. The risks for 2015 oil demand in the region are currently pointing negative as slower economic momentum in Brazil and Argentina is anticipated to curb oil demand growth for the remainder of the year.

In 2014, Latin America oil demand grew by 0.20 mb/d. For 2015, oil demand projections are unchanged from last month’s expectations as oil demand is expected to grow by 0.17 mb/d.

Middle East
In Saudi Arabia, April 2015 oil demand was characterized by a modest increase, with oil demand growth rising slightly, with total oil demand reaching around 2.35 mb/d. All products had positive growth, with the exception of fuel oil and direct crude burning. LPG, gasoline and jet/kerosene showed the highest growth levels of more than 28%, 18% and 2% y-o-y, respectively. The growth in the road transportation sector fuels was supported by increases in car sales data, while the decline in fuel oil consumption can largely be attributed to the less-than-anticipated demand for power generation requirements.

Oil demand in Iraq declined for another month. This marks the ninth consecutive monthly drop in oil requirements y-o-y. Total demand dipped by more than 12%, or 72 tb/d y-o-y, in April. Total oil demand, in absolute terms, is now at 0.52 mb/d after reaching as high as 0.75 mb/d at the end of 2013. Diesel oil, which is used in transportation and the industrial sectors, was sharply lower by around 48 tb/d, or 34% y-o-y, followed by LPG which shrank by around 15 tb/d or 25% y-o-y. On the other hand, fuel oil used for power generation recorded a rise of around 5 tb/d or around 4% y-o-y. The impact of the internal conflicts in Iraq has had a clear effect on oil consumption, imposing lower estimations for oil demand growth in the country for the rest of 2015.

For 2014, Middle East oil demand grew by 0.25 mb/d, while oil demand in 2015 is projected to increase by 0.22 mb/d.

China
Chinese data also remains solidly supported by gasoline and light distillates to fuel the ever-growing transportation sector and new expansions in the petrochemical sector. Based on the Secretariat’s calculations and initial data for the month, gasoline demand  in China reached 2.7 mb/d in April, which is higher by 0.30 mb/d or 12% y-o-y. This increase was consistent with March sales of passenger cars which enjoyed y-o-y growth of 4%, indicating solid demand for passenger cars, according to China’s Association of Automobile Manufacturers. For the first fourth months, the sales of passenger cars reached 6.97 million units, a rise of around 8% y-o-y. As for the passenger cars by type, comparing with the same period last year, SUVs continued high-speed growth, with sales up by as much as 49%. The sale of multi-purpose vehicles (MPVs) also increased by around 20% y-o-y. Diesel oil demand also picked up to reach 3.6 mb/d, higher by around 0.22 mb/d y-o-y, gaining support from a number of railway and infrastructure projects.

The overall oil demand momentum seems to have been encouraged by lower oil prices, despite increases in excise taxes and policies and regulations aimed at curbing demand. In the petrochemical sector, LPG consumption rose by around 2% in April, as compared to the same month in 2014, implying healthy demand. On the other hand, consumption of fuel oil dropped for another month as data seem to suggest a decrease in growth of around 0.13 tb/d y-o-y. Slower industrial activities seem to be the largest contributor to this slowdown.

For the remainder of 2015, oil consumption in China looks balanced. The only downside risks are all linked to slower economic activity as well as speeding up of policies encouraging a reduction in the use of transportation fuels. On the other hand, the expansion of the petrochemical sector, especially in PDH plants, and expansion projects in the refinery sector represent the upside potential for China’s oil demand growth. For 2014, Chinese oil demand grew by 0.40 mb/d, while oil demand in 2015 is projected to increase by 0.31 mb/d.
Source: OPEC