World Oil Demand in 2011

In the October 2010 Monthly Oil Market Report OPEC provides data on the current global oil situation.

Total world oil demand is projected to grow by 1.05 million barrels per day, or 1.22%. Demand is driven primarily by growth in the developing economies, where demand is expected to grow by 2.05%, whereas demand in the OECD will only grow by 0.13%. Primary drivers for the growth in oil demand are the developing countries, lead by China and India.

What may be of interest to marine is how OPEC sees residual oil shrinking. According to to the forecast, the primary drivers for growth in oil demand are gasoline (+19%), other products (+19%) and gas/diesel oil (+26%), while residual fuel is projected to shrink by 10% in 2011.

What seems evident is that refined product demand growth impacts on residual fuel availability. This trend seems to have started with the oil crisis in the mid 70's and is now accelerating with the tremendous growth in the developing economies. Additional pressure on residual oil comes from slow growth on the oil supply side, which forces refiners to increase yield. In North America, the increased reliance on feedstock from the oil sands, shrinks residual oil supply from local sources.

Declining residual supply suggests deteriorating residual fuel quality, which is diagonally opposite to the tightening fuel quality requirements of IMO. This raises the question, by when will heavy fuel oil no longer meet the required fuel quality standards?