The forecast predicting the growth of the global demand for oil products in 2011 has been decreased because of the decline in the expected level of the developed countries’ economic growth and high oil prices. In 2010 the global demand was 87.9 mb/d on average (+3.3 % or +2.8 mb/d during the year) while in 2011 it is expected to decline down to 89.2 mb/d (+1.5 % or 1.3 mb/d throughout the year).
Last month the production of oil products declined by 50 kb/d down to 87.5 mb/d at the expense of the production decline (0.26 mb/d) in the OPEC countries while the OPEC non-member increased their production by 0.2 mb/d. The supplies from the OPEC countries kept declining in April because of the military actions in Libya.
At the moment crude oil prices are declining as investors are trying to avoid risks while being concerned about the restructuring of the EU debts and the pace of the global economic growth.
It should be noted that investors are focused on how the toughening of the Chinese money-and-credit policy influence the consumption of crude oil. Since October 2010 The People’s Bank of China has increased the reserve requirement ratio for 8 times while the key interest rates have been raised for 4 times in an effort to curb inflation. However, a representative of China’s central bank assumes that these steps are not enough.
During the last weekend China banned the export of all kinds of diesel fuel because of the growing threat of the deficit of oil products. Apart from satisfying its domestic needs, China used to export fuels to Vietnam, Japan, France, USA and Singapore. The export ban is connected with the forthcoming beginning of the summer increase in the demand for gasoline and numerous protests connected with growing prices.
Barack Obama said he was determined to make concessions to the Republicans who demand a sharp increase in the oil production quota. The production of oil will be expanded in Alaska and the Gulf of Mexico, which will help the US to reduce the dependence on crude oil import. Obama underlined that in the recent months he had to face the dissatisfaction expressed by the Americans in connection with growing gasoline prices.
Thus, the high prices on oil products have a negative impact on the consumption of these fuels. Moreover, a decline in the economic growth may force the demand for oil to go down, which may also favor the correction seen in the market of crude oil.
The Department of Commodity Trading,
