Global oil demand growth likely to decelerate in 2017 and 2018

In 2015, the oil demand growth had propelled by 2m b/d after the collapse in oil prices in 2014 and the strong growth continued by 1.6 million b/d in 2016. According to a Nordea Bank research report, global demand growth is expected to slow to 1.3 million barrels per day this year and 1.2 m b/d in 2018.

From 2017, growth momentum is likely to wane as improving fuel efficiency and structural changes in the Chinese economy away from energy-intensive sectors towards services would be a drag on oil demand growth. Also, large declines are expected in Japan’s oil demand, particularly as more nuclear stations are brought back into operation and because of vehicle efficiency improvements.

Asia is expected to account for about 70 percent of the rise in global oil consumption. In spite of the structural changes in China, along with India, China would continue to be the main driver of global oil demand growth, stated Nordea Bank.

Sector wise, the transport and petrochemical sectors are likely to drive oil demand growth in the forecast period, Climate change and severe air pollution in several cities around the world have contributed to pressure for more environmentally friendly transport fuels and solutions. Climate concerns, pollution and the fourth industrial revolution would set off rapid changes to the transport habits and fuel consumption, added Nordea Bank.

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