World oil demand contracted to a low of 85.6 million barrels per day (mbpd) in 2009 in the wake of the global economic downturn, but has picked up significantly since then, with the International Energy Agency (IEA) predicting an average of 89.9mbpd in 2012; however, this headline figure masks some startling inequalities geographically, temporally and based on the type of hydrocarbon.
On a global scale, it is simplest to split demand between OECD and non-OECD countries.
With a contraction in demand during Q1 2012 to the tune of almost 800,000bpd among OECD countries, the overall growth in demand during the quarter came exclusively from non-OECD nations.
This trend is likely to continue for the rest of the year, with little or no growth in demand coming from those nations that make up the OECD.
Regional oil demand
Drilling down past these two broad categories, it is possible to see where demand is most likely to come from at a regional level; for example, Europe’s average demand in 2008 was 15.4mbpd, but slumped to 13.7mbpd in Q1 2012. By comparison, Latin America witnessed an average of 6mbpd in 2008, which had ballooned to 6.4mbpd by Q1 2012. The IEA expects a further increase throughout the rest of 2012, averaging at 6.6mbpd for the year as whole.
In each quarter, demand appears to come from different regions globally, as the cycle of seasons and a number of other factors impact on hydrocarbon requirements.
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In Q3 2012, North America is expected to need 23.6m/bpd to sustain itself, with demand dropping on average by 100,000bpd in Q4. However, this trend is expected to reverse in the former Soviet Union, where demand will rise from 4.9 to 5.0mbpd over the same period.
A closer look at fuel type also reveals where demand is expected to come from over the next three quarters. Gas and diesel oil will drive overall demand, with the OECD forecasting that year-on-year growth for this fuel type will reach a level of 601,000bpd throughout the year; however, demand for residual fuels is likely drop by more than 100,000bpd in the same period.