EIA: US Oil Demand on the Rise
08 February 2006
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| The EIA forecasts an average 2% growth in demand per year. |
In the just-released February 2006 edition of its Short Term Energy Outlook (STEO), the DOE’s Energy Information Administration (EIA) forecasts an increase in petroleum demand in the US averaging 2% per year for the next two years.
The agency forecasts that demand for gasoline—which accounts for about half of total petroleum consumption—will increase an average 1.7% per year. This follows on a 0.3% decline in total oil consumption in 2005 (with the exception of gasoline, demand for which still increased during the year). (Earlier post.)
The forecast increase in demand will push the US past the 21 million barrel per day mark, with an average daily oil consumption of 21.02 million barrels projected for 2006. Currently the agency foresees this increasing to 21.48 mbpd in 2007.
Growth in US consumption will push the growth in global demand from 1.2 million barrels per day (mbpd) in 2005 to 1.6 mbpd in 2006, according to the EIA. Economic growth in developing Asian countries (excluding China) will increase that an additional 300,000 barrels per day. The agency expects Chinese demand growth to remain around 500,000 barrels per day. OECD demand growth outside of the United States is expected to remain low.
Many of the same factors that drove world oil markets in 2005, such as low world spare oil production capacity and rapid world oil demand growth, will continue to affect markets in 2006 and 2007. Other factors are less certain, such as the frequency and intensity of hurricanes, other extreme weather, and geopolitical instability.
The EIA anticipates that the price of West Texas Intermediate (WTI) crude oil, which averaged $56 per barrel in 2005, will average $65 per barrel in 2006 and $61 in 2007. The agency predicts that retail regular gasoline prices in the US, which averaged $2.27 per gallon in 2005, will average $2.45 in 2006 before dropping down to $2.34 in 2007.
Why is consumption of fuel oil growing? Is this not primarily used for heating? I would have thought that oil heat would be in decline, both because fewer people would be installing it in new homes, and because homes should be, in aggregate, be improving on insulation and efficiency.
So -- is fuel oil used for heating? Why is it growing? Should public policy be trying to reduce this use of oil?
Posted by: stomv | 08 February 2006 at 09:47 AM
It has something to do with the population / migration?
Posted by: Alfred | 08 February 2006 at 10:10 AM
Maybe fuel oil is another name for diesel fuel??
And maybe just maybe transportation sector is growing??
Posted by: W2 | 08 February 2006 at 10:24 AM
Fuel Oil is burned in power plants also
More often lately because of natural gas prices/supplies.
Posted by: lotfw | 08 February 2006 at 01:11 PM
its always the same with americans,
just forget them,
if they don't want to learn, then they should doom
Posted by: usawilldoom | 08 February 2006 at 03:37 PM
This year Big Oil reports RECORD profits...still we subsidize them and send our sons and daughters to protect their drilling rights. There's no question who Bush's puppeteers are. They have him and the rest of the country by the short hairs. It's hopeless.
Posted by: disgusted | 08 February 2006 at 05:43 PM
Population is ever increasing.
Automobils are ever increasing.
Cities growing bigger.
No significant changes on energy technology, everyone still go to fuel pumps frequently...
Tell me dudes, why would the oil demand will not increase??
Posted by: rexis | 08 February 2006 at 05:53 PM
Most of it is related to population growth, and most of U.S.'s population growth comes from illegal immigration.
Here's an interesting report on the issue:
Immigration and U.S. Population Growth:
An Environmental Perspective
http://www.npg.org/specialreports/immxuspopgrowth.htm
That being said, oil use reduction should still be a goal. Closing the border would in fact be a good first step.
Posted by: anon | 09 February 2006 at 02:17 AM
anon: Please don't blame our profligate and growing use of fossil fuels on desperately poor illegal immigrants. Your argument goes: "more population leads to more fossil fuels, and illegal immigration leads to more population, therefore illegal immigration causes our fossil fuel and GHG consumption growth." But U.S. *citizens* consume five times the oil of the world average, and illegal immigrants are not the ones driving Town Cars and Hummers anyway.
If we were really serious about stopping illegal immigration, we'd penalize their employers, but such penalties are never passed on any governmental level because the hospitality industry and agribusiness wield too much legislative clout. Not to mention immigrants drive most of this country's paltry savings and economic growth.
Please take the xenophobic rhetoric somewhere else, it doesn't belong on Green Car Congress!
[q->t to email]
Posted by: Adam | 09 February 2006 at 09:05 AM
Economic growth demands more energy, thus more oil is demanded; no suprise.
Adam: While I agree that illegal immigration into the united States is probably not a main contributor to incresed oil usage, the desire for the government to tighten or at least enforce its immigration laws does not make one xenophobic. It's name calling that has no place on Green Car Congress.
Posted by: tthoms | 09 February 2006 at 09:38 AM
"more population leads to more fossil fuels, and illegal immigration leads to more population, therefore illegal immigration causes our fossil fuel and GHG consumption growth."
The discussion is on the reason why fuel consumption has increased even though fuel efficiency has also increased (albeit slowly). The answer is population growth, which has been mainly from immigrants and their descendents, as the report I provided clearly shows.
"But U.S. *citizens* consume five times the oil of the world average, and illegal immigrants are not the ones driving Town Cars and Hummers anyway."
Comparing to the world average is dubious because much of the world is largely urban and many in the world can't even afford a car. More importantly the question here is why the increase in demand, not if efficiency can be improved. Everyone that visits this site knows that gains in efficiency can be made.
"If we were really serious about stopping illegal immigration, we'd penalize their employers, but such penalties are never passed on any governmental level because the hospitality industry and agribusiness wield too much legislative clout. "
I disagree, but the solution is largely irrelevant to the point of the current discussion. The point is that population gains have offset increases in efficiency, and most of that population gain has come from immigration.
"Not to mention immigrants drive most of this country's paltry savings and economic growth."
Most of this country's savings and economic growth? Source please.
"Please take the xenophobic rhetoric somewhere else, it doesn't belong on Green Car Congress!"
Are you really calling me "xenophobic" and at the same time claiming that my statements are mostly rhetoric? That makes a lot of sense.
Posted by: anon | 10 February 2006 at 02:21 AM
What an ugly thread.
Posted by: Joseph Willemssen | 17 February 2006 at 09:55 AM
The problem with US immigration policy is that there is next to none, that's why most immigrants are considered (and are forced to be) 'illegal'. It's a great deal for the corporations that get to exploit them, especially since if they try to start or join a union they can easily be deported by the friendly INS on a whim. The working poor largely used public transportation or walk to their minimum-wage-slave jobs, getting a car, insurance and licence is not feasible. It's the legal immigrants who work in higher paying jobs that can afford the cars and trucks to drive the consumption up, along with the current population driving more and more miles every year.
Posted by: Schwa | 17 February 2006 at 02:50 PM