For the 14th straight year, oil lost market share in the global energy mix. Oil began the new millennium with a nearly 39% share of total global energy consumption. It finished 2013 with slightly less than 33%, roughly losing a half a percentage point per year. Fittingly, global oil production barely registered an increase last year, rising less than 0.2% for crude oil, or 0.8% for liquids.
Note however that while global oil production barely advanced, global oil consumption was stronger, rising as much 1.4%. Where did the extra oil come from? The record of global inventories tells the story, as a steady global de-stocking took place all year—yet another reason for oil’s persistent price strength. | see: Oil’s Share of Global Energy Use 2000-2013.
Oil’s loss of market share presents no barrier at all to the next repricing, however. TerraJoule.us has called for the next repricing of oil to begin at any time now. Oil markets are in fact much tighter than anticipated, with Non-OECD consumption having risen once again this quarter. Meanwhile, OECD consumption while not advancing much has indeed bottomed. And finally, OPEC is heading towards the classic dilemma: every extra barrel supplied only lowers spare capacity further. We expect to see the following headline before year-end: “New Oil from North America Not Enough to Quell Prices, as Oil Market Tightens.”
—Gregor Macdonald, Editor of TerraJoule.us, monthly ebook/newsletter covering the macro of global energy.
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