Global Product Demand and Supply at a Glance
Aug. 17, 2017
Global oil demand is expected to grow at 1.3% in 2017 to over 96.9 million b/d with significant gains projected in the middle-light end of the barrel. Over the forecast period (2017-2021), we are likely to see global oil demand expand by 1.0% annually, climbing above 100 million b/d. Among the biggest drivers of this growth are naphtha, gasoline and gasoil, with positive annual growth factors of 1.5%, 2.1% and 2.0%, respectively (Figure 1). On a regional basis, emerging economies in the Far East and South East Asia are expected to boost oil demand by over 2.1 million b/d, with similar performance projected in the Middle East and India. Europe and North America oil demand will expand by a combined 646,000 b/d through 2021, however, the final year of our forecast brings about an interesting change. Within these regions demand is forecast to fall by 158,000 b/d in 2021 as the growing presence of renewable energy reduces the dependence on oil.
Global oil product supply is forecast to expand by 1.3% this year with gains witnessed across all sectors excluding fuel oil, which is expected to fall by 1.7% year-on-year (Figure 2). Naphtha is projected to be the greatest performer with supply rising 2.4% year-on-year in 2017; however, in the long term it is gasoline that will grow the greatest, adding around 1.5 million b/d before the close of 2021. Gasoil will follow close behind with an additional 1.1 million b/d expected over the forecast period, served mainly by rising output in the Far East.
The Middle East is on track to add over 460,000 b/d of gasoil supply this year and become a more major supplier over the next four years, increasing the net balance by 3 million b/d. Regarding jet fuel, we project global supply to rise by about 620,000 b/d before the end of our forecast period, supported mainly by the Far East and Middle East, which we expect to serve the deficient Northern European market. The Northern European region will stand as the largest net balance of gasoline over the next five years, while Mediterranean output is on track to fall. The Middle East will remain the largest net balance of naphtha, continuing to push volumes to the Far East where the deficit is expected to remain generally flat to slightly decline, supporting long-haul clean tanker trading to the East given attractive arbitrage economics.
Order a copy of McQuilling Services 2017 Mid-Year Tanker Market Update
The Mid-Year Tanker Market Outlook Update provides an outlook for spot market freight rates and TCE revenues for 19 major tanker trades, including two triangulated trades, across eight vessel classes for the second half of 2017 and the remaining four years of the forecast period to 2021. We revisit our forecasting process at the mid-year point, distilling data from the first half of the year to better understand recent market developments and expectations for the future. In our view, this process allows us to accurately adjust our forecasts and provide additional value to our clients.
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