Oil & Gas Intensity Around the World.

Programming Note: I am headed off with the family on our summer vacation next week therefore there will be no posts. I will return on July 21st. Hope everyone is enjoying their summer.

The Gist: Oil demand intensity continues to hang in there while natural gas continues its upward trend. A scenario for a resurgence in hydrocarbon demand in Europe for the first time in a quarter century. The amount of trade in petroleum relative to demand remains in decline.

The Energy Institute’s Statistical Review of World Energy (formerly BP’s), (HERE), remains the gold standard for historical data—an indispensable reference since its first publication in the 1950s.

With the release of the latest edition, I’ve updated some of my favorite charts—blending data from the Energy Institute with my own archival sources to extend the time series as far back as possible.

Let’s dive in.

I first came across this opening chart nearly 25 years ago (HERE), and it became the cornerstone of the 2000s commodity bull market: China’s oil intensity—measured as oil demand per capita—rising toward the global average.

Since then, China’s oil demand intensity has continued to climb, but what many—including myself—didn’t fully anticipate was the steady decline in oil intensity across most major developed economies, as illustrated in the chart above.

Some economists still rely on oil intensity trends—especially in the context of China’s aging population—to forecast long-term oil prices. But the historical data suggests otherwise. A simple look at the the two reveals little consistent correlation between oil intensity and price, as shown below.