World Oil Consumption Reaches Record 87 Million Barrels/Day; Developing Country Share Expands

There are 86,400 seconds in a day: 24 hours x 60 minutes x 60 seconds. In February, according to the Oil Market Intelligence publication of industry consulting firm Energy Intelligence, the world consumed 87,069 million barrels of petroleum products, a new monthly record. That amount equals 1,007 barrels every second. Haver carries the daily average demand information in its OMI database, offered in partnership with Energy Intelligence. The idea for this time calculation is not ours, though. It comes from an investment consultant in the field, Peter Tertzakian, author of a book published last year titled, appropriately enough, "A Thousand Barrels a Second".

February's daily oil consumption for the total world was up 3.4 million barrels from January (4.1%), although February demand is frequently high, and this was just 1.5% above February 2006. A notable part of the increase came in the US, where demand was 21.6 million barrels daily, 5.4% more than a year ago. The US experience is clearly a spike and as with other economic data for the month -- jobs in the construction industry and retail sales, for examples -- was likely related to the swing to unusually cold weather, particularly compared with mild February weather last year.

Even with this February rise, the US share of world oil consumption is no higher than it has been running over the last couple of years: just under 25%. These data illustrate well what we've heard more casually elsewhere: the significant growth in oil consumption is coming from developing regions of the world. For instance, in China, the last 12 months' average has been 7.1 million barrels daily, 6.2% ahead of the 12 months ended February 2006.

From the third graph, we can see that the US share of the world total over a longer period, since 2000, has actually declined. In dramatic contrast, the OMI grouping called "developing countries"* has gained share. From 26.4% in 2002, those countries expanded to 28.0% in 2006.

These graphs illustrate some upcoming innovations in Haver's DLXVG3 software. In the Chinese example, we were able to take a percent change in a moving average, utilizing a new "nested function" capability. In the market share graph, we were able to make two separate calculations involving three different series. Elsewhere this past week in several of Robert Brusca's articles, you have seen three or even four series on a single graph. These new features will be available to clients soon and we're very excited about them.