In 2010 the world consumed about 88.2 million barrels of oil per day–2.7 million barrels per day more than in 2009. Whether you look at the incremental increase in demand or the percentage gain, oil demand in 2010 increased at the second-fastest pace in 30 years. Much of this rebound stemmed from the snap-back in consumption that followed the severe 2008-09 recession. But the magnitude of this recovery took many analysts and industry participants by surprise.
Investors should also remember that although US oil demand remains well under its 2004-05 high, global oil demand hit a new peak in 2010. Demand growth in 2011 won’t match up with last year’s resurgence. However, the International Energy Agency’s (IEA) forecast still calls for global oil demand to grow by more than 1 million barrels per day to 89.3 million barrels per day. This uptick in consumption hardly qualifies as weak; oil demand has grown at an average annual rate of 1.05 million barrels per day since 1990.
The IEA has raised its estimate of 2011 crude oil demand sharply higher since July 2010. Although the agency has trimmed its projection by about 300,000 barrels per day since August, these estimates remain far higher than they were six months ago…READ MORE.
My Take: The piece linked above provides a great overview of projected oil demand with some industry insights in terms of how investments are likely to react given a run-up in price of a barrel of oil. Elliott Gue is an expert in energy related investments and does a great job explaining some of the industry’s mechanics (investing related) in a way that is accessible to a wide audience.