What growing global oil thirst means for economy

Leslie Lindeman, a motor man for Raven Drilling, works on an oil rig drilling into the Bakken shale formation on July 28, 2013 outside Watford City, North Dakota.

A new International Energy Agency report out Tuesday says global oil demand will rise by 1.3 million barrels per day this year, higher than its previous forecast. That number tells a story about the global economy and will also have impact in America.

“It’s definitely a positive sign,” Fadel Gheit, an Oppenheimer managing director and senior energy analyst. “Higher demand for energy in general and for crude oil in particular is an indication the global economy is back on track.”

More oil demand means more shipping and more production and hopefully more jobs. On the down side, more oil use and production also means higher environmental impact.
America is having an oil boom, but energy companies can only profit so much. Current law allows export of only a tiny fraction of crude. As the domestic boom continues, expect a stronger push to change that.

“The producers who are producing that are saying, well, gosh, let us export,” explains Sarah Emerson, president of Energy Security Analysis, Inc. “So 2014, in that sense, is a bit of a tipping point.”

Now that America’s using more and more of its own oil, more companies here will be looking to sell abroad.

Mark Garrison: There are lots of ways to read a boost in oil demand. Here’s one, from Oppenheimer senior energy analyst Fadel Gheit.

 

Fadel Gheit: It’s definitely a positive sign. Higher demand for energy in general and for crude oil in particular is an indication the global economy is back on track.

 

More oil demand means more shipping and more production, hopefully more jobs. On the down side, more oil use and production also means higher environmental impact. America’s having an oil boom, but energy companies can only profit so much. Current law allows export of only a tiny fraction of crude. As the domestic boom continues, expect a stronger push to change that. Sarah Emerson is president of Energy Security Analysis, Inc.

Sarah Emerson: The producers who are producing that are saying, well, gosh, let us export. So 2014 in that sense is a bit of a tipping point.

Now that America’s using more and more of its own oil, more companies here will be looking to sell abroad. I’m Mark Garrison, for Marketplace.

About the author

Mark Garrison is a reporter and substitute host for Marketplace, based in New York.

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