The oil and petroleum industry took its lumps in 2009 as the global recession gripped nearly all developed countries in its grasp. Signs of recovery in the global energy market have been mixed, but petroleum products seem to be leading all others in recovery. Industry analysts are not downgrading their prior forecasts for 2010 and beyond, but recoveries take time, and recent market uncertainty has lead to a lack of confidence that continues to restrict investment plans in productive capacity.
The global pullback in liquid energy consumption in 2009 was dramatic:
- Global energy demand was lower in 2009 than the previous year, the first such decline since 1982 and independent of forex adjustments.
- Energy consumption reflected the pattern of recession and recovery.
- Primary energy consumption fell by 1.1 percent in 2009, the first decline since 1982.
- Consumption in the industrialized countries of the OECD fell by 5 percent, more than their decline in GDP.
- Industrialized countries in the OECD consumed less energy last year than 10 years ago.
- Energy consumption outside the OECD rose by 2.7 percent, higher than their increase in GDP and driven by growth in China, confirming a continuing shift toward developing world countries.
The decline in energy consumption in 2009 was definitely a rare event, but preliminary figures for 2010 do show that consumption is back on the rise. However, the annual growth rate of global consumption of liquid energy products has been on a gradual decline since 2005.
Industry analysts at the U.S. Energy Information Administration (EIA) are standing behind their positive forecasts for 2010. EIA expects world oil prices will rise slowly as world oil demand increases because of projected global economic growth, slower growth in non-OPEC oil supply, and continued production restraint by OPEC. A gradual reduction in global oil inventories should also give support to firming oil prices.
Projected world oil consumption will also increase by 1.6 million barrels per day in 2010. Countries outside of the OECD, especially China, Saudi Arabia, and Brazil, represent most of the expected growth in world oil consumption. Among the OECD countries, only the United States is expected to show significant increases in oil consumption. Global oil consumption in 2011 is seen to grow by another 1.5 million barrels per day.
Business Monitor International (BMI) is sticking with its forecast that the OPEC basket of crudes will average US$83.00 per barrel in 2010. They also believe that the three benchmarks, Brent, West Texas Intermediate (WTI) and Urals, will average around US$85.11, US$88.22 and US$83.62/bbl respectively, with Dubai coming in at US$83.14.
An in-depth view on oil and gas supply may also be purchased from other industry research firms, but for the time being, preliminary figures for 2010 appear favorable and positive forecasts for the balance of the year are holding.