Last year proved to be a trend-bucking 12 months as global energy demand accelerated despite slackening economic growth, according to BP’s latest Statistical Review of World Energy.
Oil prices also remained remarkably stable against the backdrop of some severe supply disruptions – most notably in Libya – as the US unconventionals boom drove domestic consumption.
The UK supermajor’s 63 instalment of a review dating back to 1952 showed that the global economy balanced last year. However, non-OECD energy demand was below average, while OECD demand was above average, mainly driven by the US.
China, the US and Russia were, in that order, the three largest consumers of oil and gas last year. But the share of oil in the global energy mix fell to 33%, whereas coal rose to around 30%. Gas lost some market share, as did nuclear, but renewables were up, while hydroelectric stayed flat.
Energy consumption has been flat in recent years in the OECD region despite economic growth. However, 2013 broke that pattern, with global energy consumption growing around 2.3% despite a slackening in economic growth, and the key economies of US and China going down very divergent paths, BP’s review found.
In the OECD region, demand growth was about 1.2% - almost on a par with GDP growth. In the non-OECD countries, despite being up 3.1%, consumption growth was at its slowest in 13 years - except for the crisis year of 2009 – and “substantially below GDP growth”, BP chief economist Christof Ruhl said.
North American consumption growth was even faster than GDP growth than the rest of the OECD region, while Asian consumption growth was below 4% for the first time in years, Ruhl said.
Whereas the US and China together account for about 70% of oil demand, the former was responsible for the relative strength in oil demand growth last year, BP said. With 400,000 barrels of oil per day, the US slightly outpaced China in terms of oil demand last year. This was against an average annual decline in the US of 110,000 bpd over the last four years, Ruhl said.
US oil production – driven by tight oil plays – reached 10 million barrels per day – a jump of more than 1 million bpd and the highest for the US since 1996.
Ruhl said this rise in US oil production was largely the reason for the continued stability of the oil price, as disruption due to geopolitical factors in the Middle East and North Africa was “matched almost barrel-for-barrel” by the increase in US output.
“Higher prices may induce more production over time, but virtually nothing else of logical substance connects these two developments,” he said. “Therefore, I think markets will remain on edge – or remain eerily calm, as we have seen in prices today – until one side gains the upper hand.”
BP chief executive Bob Dudley added: “Take away disruptions and we would have seen lower energy price – no doubt. But take away the production increases and we would have seen a much higher one.”