Traffic jams in Beijing and humming air conditioners in Dubai are replacing U.S. highways and suburbs as the driver of global oil prices...
Traffic jams in Beijing and humming air conditioners in Dubai are replacing U.S. highways and suburbs as the driver of global oil prices.
China, India, Russia and the Middle East for the first time will consume more crude oil than the U.S., burning nearly 20.7 million barrels a day this year, an increase of 4.4 percent, according to the International Energy Agency (IEA) in Paris. U.S. demand will fall 2 percent to about 20.4 million barrels daily, the IEA says.
Economic growth of more than 8 percent in China and India, coupled with increasing car ownership among the countries’ combined populations of 2.5 billion people, will more than compensate for falling U.S. demand. Oil use worldwide will increase 2 percent this year because of growth in emerging markets, the IEA says.
“As far as the oil market is concerned, demand growth is going to be continued to be driven by China and the Middle East,” Mike Wittner, head of oil research at Societe Generale SA in London.
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The rising oil price will benefit Exxon Mobil Corp., BP Amoco PLC and Royal Dutch Shell PLC, while punishing a U.S. airline industry that recorded four bankruptcies in a month. Higher energy costs will push up food costs at a time when corn and rice are close to new highs.