With the publication of the Energy Institute’s Statistical Review of World Energy, (HERE), I update a handful of charts each year that were first introduced to me 20 years ago.
Oil & Gas Demand per capita
Oil Demand vs. Population, GDP & Productivity.
The Two Charts that Drive Oil Prices Over the Long Run.
Let’s begin.
This first chart underpinned the bull market not only for oil but for many other commodities in the 2000s: China’s oil intensity, or oil demand per capita, rising to the world equivalent.
Since that time, oil demand per capita in China and India has continued to rise, but what was not foreseen by many, myself included, was the continued decline in most major developed world markets as depicted above.
Some economists and commentators rely on this oil intensity analysis as a driver of prices over the long run. However, simply eyeballing the historical relationship between the two reveals little correlation over the decades.
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