US demand for oil grew by more than China's last year for the first time since 1999, according to the International Energy Agency, giving the strongest indication of how abundant energy supplies are driving an economic resurgence in the US.
The IEA – whose forecasts are the benchmark for the energy sector – said US oil demand grew by 390,000 barrels a day last year, or 2 per cent, reversing years of decline. Chinese demand grew by 295,000 b/d, the weakest in at least six years.
Oil demand figures are closely followed as indicators of economic growth because use of fuels such as petrol and diesel indicate the strength of industrial and consumer activity. As China’s economy boomed in the past decade its oil demand has surged, while US consumption has been falling steadily since 2005.
But, with new drilling techniques helping to unlock US shale oil and gas reserves, the country’s consumption of oil fuels is rising sharply again.
"It is clear that the US economy is rebounding very strongly thanks to its energy supplies," said Antoine Halff, head of oil market research at the IEA. "Sometimes, oil is a lagging [behind] indicator, but sometimes it . . . shows an economy is growing faster than thought," he added.
The IEA said US demand had been driven by fuels such as propane, which is used in petrochemical plants, demonstrating a pick-up in industrial activity in the US. European oil demand is also showing signs of growth for the first time since the financial crisis. –(Copyright The Financial Times Ltd 2014)
