Rising demand for oil: 'Growth is easy when you've been in the pits'
Oil tankers arrive at Grangemouth oil refinery.
The International Energy Agency tracks which countries use how much oil -- and the United States is always at the top of the list.
“Every single day, just over 19 million barrels of oil are consumed in the U.S.,” says Matt Parry, senior oil market analyst for the agency. That accounts for about 20 percent of global oil use. China comes in second, using about 10 million barrels a day.
In recent years, China’s demand has been growing, while demand here has been slouching. But not in 2013. For the first time in more than a decade, demand for oil in the United States grew faster than China’s.
“The strength of it has exceeded everyone expectations,” says Parry.
Why? In part, the answer has to do with the recession. Growth is easy when you’ve been in the pits.
“As the economic activity picks up, there’s a lot more transportation going on,” says Peter Hartley, an economist at Rice University. There are more people driving to more jobs. There are more trucks, delivering more things.
And, the U.S. is drilling more of its own oil and natural gas. Supply is up. Prices are down. “And that’s really stimulating a renaissance of the petro-chemicals in the United States,” says Hartley. Plastics, chemicals, fertilizers. We’re making more of them here now.
But, don’t expect U.S. demand to continue rising. The energy agency says petrochemical companies in this country are pretty maxed out. Our cars are only going to get more fuel efficient.
“Over time we think that U.S. demand is going to be flat at best, or probably trending a bit down,” says Mark Schwartz, president of PIRA Energy group, a consulting firm. China, on the other hand, likely has a whole lot of growth in its future. More people there are looking to buy cars, to travel, and to consume more like we do here in the United States.