LONDON: Strong global demand for oil and gas will shift in the next five years toward petrochemicals and away from motor fuels gasoline and diesel, the International Energy Agency (IEA) said.
Demand for products ranging from fertilizers to plastics and beauty products would drive roughly a quarter of the expected oil demand growth to 2023, the IEA said in its five-year outlook.
This would bolster more anaemic growth in gasoline and diesel, also known as gasoil, as fuel efficiency and declining developed world consumption takes its toll, it said.
World oil demand is expected to rise by 6.9 million barrels per day (bpd) to 2023, or 1.2 million bpd per year, it said, with a quarter of this growth, or 1.7 million bpd, coming from demand for petrochemical feedstocks ethane and naphtha.
“Global economic growth is lifting more people into the middle class in developing countries and higher incomes mean sharply rising demand for consumer goods and services,” the IEA said.
“A large group of chemicals derived from oil and natural gas are crucial to the manufacture of many products that satisfy this rising demand,” it added.
Naphtha is made by oil refineries processing crude, but other petrochemical feedstocks — ethane or liquefied petroleum gas (LPG) — largely bypass the refining industry.
The boom in US shale oil boom has dramatically expanded the availability of ethane, and a string of new projects on the US Gulf Coast are underway to process it.
In total, the world is expected to add 1.4 million bpd in new petrochemical-producing steam crackers to 2023, the IEA said.
Demand for ethane would expand by the fastest pace in the next five years, rising by 885,000 bpd, followed by naphtha with growth of 495,000 bpd and LPG with growth of 40,000 bpd, it said.
Jet fuel, supported by growing demand for air travel, would grow by a 1.2 percent to 2023, the IEA said.
But it said demand for gasoline and diesel would rise by 0.7 percent each, with expansion slowed by fuel efficiency standards that now cover two thirds of the world’s top car markets.
More than 80 percent of global car sales are now in markets covered by efficiency standards, including China, India the US and Europe. The IEA said this “will impact strongly on future oil demand.”
Oil demand growth to shift to petrochemicals away from motor fuels
Oil demand growth to shift to petrochemicals away from motor fuels
Gold rises on Iran war safe-haven bid; firm dollar limits upside
BENGALURU: Gold prices rose on March 5, lifted by safe-haven demand amid an escalating war in the Middle East, while a stronger dollar and concerns around the US Federal Reserve’s monetary policy capped gains.
Spot gold was up 0.6 percent at $5,168.43 per ounce, as of 11:55 am Saudi time. US gold futures for April delivery were up 0.9 percent at $5,179.20.
Israel launched a large wave of strikes on Tehran on March 5, targeting what it said was infrastructure belonging to the Iranian authorities, after Iranian missiles sent millions of Israelis rushing into bomb shelters.
“On the one hand, there may be greater safe-haven demand for gold given the ongoing conflict in the Middle East. On the other hand, the risk of a prolonged period of higher energy prices that takes rate cuts off the table, and adds to the chance of rate hikes, could be capping further gains,” said Hamad Hussain, a climate and commodities economist at Capital Economics.
The US dollar rose about 0.3 percent after briefly retreating from three-month highs, as the fallout from the war roiled global markets and kept sentiment fragile.
Concerns about energy supply continued to drive up oil prices and stoke inflation fears.
Gold is considered a hedge against inflation in the long run, but also tends to thrive when interest rates are lower, as it is a non-yielding asset.
President Donald Trump, on March 4, officially nominated former Federal Reserve Governor Kevin Warsh to be the US central bank’s next chair.
US economic activity grew slightly, prices continued to increase and employment levels were stable in recent weeks, the Federal Reserve said on Wednesday in its latest “Beige Book” report.
Markets expect the Fed to keep rates steady at its next policy meeting on March 18, according to CME Group’s FedWatch tool.
Investors are looking out for the weekly US jobless claims data, due later today, and the US employment report for February on March 6 for further clues on monetary policy this year.
Spot silver rose 0.5 percent to $83.80 per ounce. Platinum gained 1.1 percent to $2,172.20, while palladium lost 0.7 percent to $1,662.07.
