Petrol prices rose to 55-month high while diesel became costliest ever. On Friday, petrol increased marginally by 1 paisa and diesel by 4 paise.

Petrol in the national capital, Delhi now costs Rs 74.08 a litre, the highest since September 2013 when rates had hit Rs 76.06. Diesel price at Rs 65.31 is the highest ever.

The rise in petrol and diesel prices is due to rise in the rate of crude oil. India imports more than 80% of its crude oil requirement from the international market. This makes our petrol and diesel price directly proportional to international crude oil prices.

The Oil Ministry had earlier sought a reduction in excise duty on both petrol and diesel to cushion the impact of rising international oil prices. This was however turned down by Finance Minister Arun Jaitley in the budget presented on 1st February.

India imports more than 80% of its crude oil requirement from the international market.

Petrol prices rose to 55-month high while diesel became costliest ever. On Friday, petrol increased marginally by 1 paisa and diesel by 4 paise. Petrol in the national capital, Delhi now costs Rs 74.08 a litre, the highest since September 2013 when rates had hit Rs 76.06. Diesel price at Rs 65.31 is the highest ever. The rise in petrol and diesel prices is due to rise in the rate of crude oil. India imports more than 80% of its crude oil requirement from the international market. This makes our petrol and diesel price directly proportional to international crude oil prices. The Oil Ministry had earlier sought a reduction in excise duty on both petrol and diesel to cushion the impact of rising international oil prices. This was however turned down by Finance Minister Arun Jaitley in the budget presented on 1st February.

Petrol rises to 55-month high, diesel costliest ever

In a major achievement, India has overtaken Japan to become the world's second-largest producer of crude steel in February, according to the Steel Users Federation of India (Sufi).

At present, China is the largest producer of crude steel in the world, accounting for more than 50 per cent of the production.

India's crude steel production was up 4.4 per cent and stood at 93.11 million tonnes (mt) for the period April 2017 to February 2018, compared with April 2016 to February 2017, which has helped India to overtake Japan and becomes the second largest producer of crude steel in the world, the federation said in a statement here.

India overtook the US in 2015 to become the third largest producer of crude steel.&nbsp;

Attributed the growth in steel production to the right policies undertaken by the Modi government, Nikunj Turakhia, president, Sufi said, "The government has taken host of steps to curb imports, push local demand with initiatives like 'Make in India', implementation of the GST and infrastructure projects, to encourage the domestic market."

According to the World Steel Association, India produced 8.4 mt of crude steel in February 2018, up 3.4 per cent over February 2017.

Turakhia said the steel ministry is working proactively to lay down the road map to achieve 300 million tons by 2030 and "we seem to be on the right track".

"In addition, quick resolution of various big-ticket steel mills under the Insolvency and Bankruptcy Code and the National Company Law Tribunal is expected to further hasten the process of achieving higher capacity utilisation," he added.&nbsp;

Currently, China is the largest producer of crude steel in the world, accounting for more than 50 per cent of the production

In a major achievement, India has overtaken Japan to become the world's second-largest producer of crude steel in February, according to the Steel Users Federation of India (Sufi). At present, China is the largest producer of crude steel in the world, accounting for more than 50 per cent of the production. India's crude steel production was up 4.4 per cent and stood at 93.11 million tonnes (mt) for the period April 2017 to February 2018, compared with April 2016 to February 2017, which has helped India to overtake Japan and becomes the second largest producer of crude steel in the world, the federation said in a statement here. India overtook the US in 2015 to become the third largest producer of crude steel. Attributed the growth in steel production to the right policies undertaken by the Modi government, Nikunj Turakhia, president, Sufi said, "The government has taken host of steps to curb imports, push local demand with initiatives like 'Make in India', implementation of the GST and infrastructure projects, to encourage the domestic market." According to the World Steel Association, India produced 8.4 mt of crude steel in February 2018, up 3.4 per cent over February 2017. Turakhia said the steel ministry is working proactively to lay down the road map to achieve 300 million tons by 2030 and "we seem to be on the right track". "In addition, quick resolution of various big-ticket steel mills under the Insolvency and Bankruptcy Code and the National Company Law Tribunal is expected to further hasten the process of achieving higher capacity utilisation," he added.

India pips Japan to become second largest crude steel-maker

Diesel prices have touched a record high of Rs 61.74 per litre and petrol prices have crossed Rs 71 as international oil rates continue to rally.

Petrol price rose to Rs 71.18 per litre in Delhi today, the highest since August 2014, according to daily fuel price list of state-owned oil firms.

Diesel prices soared to their highest level of Rs 61.74 per litre in Delhi. It is being sold at Rs 65.74 in Mumbai, where the local sales tax or VAT rates are higher.

Prices have been on the rise since December 12, 2017. Diesel in Delhi on that day was priced at Rs 58.34, and in past one month has risen by Rs 3.4. Petrol price has during the period risen by Rs 2.09, according to oil companies.

Two the most traded benchmark crude globally have risen the most since December 2014 - Brent touched USD 70.05 a barrel last week and WTI reached USD 64.77.

The rally in oil prices has renewed calls to the government to cut excise duty to cushion burden on common man.

The BJP-led NDA government has during its tenure cut excise duty only once - by Rs 2 per litre in October 2017 when petrol price had reached Rs 70.88 per litre in Delhi and diesel was priced at Rs 59.14.

Because of the excise duty cut, diesel prices had on October 4, 2017 come down to Rs 56.89 and petrol to Rs 68.38. However, subsequent rally has wiped away all the gains and prices have touched new highs.

Last week, Oil Minister Dharmendra Pradhan had responded to questions on whether the Centre would cut excise duty on the two fuel, by asking states to first cut VAT.

&quot;Why dont you ask state governments to reduce first,&quot; he said on January 1 responding to reporters question on excise duty cuts. &quot;Government of India reduced excise duty (in October last year). We are appealing to states to reduce VAT.&quot;

Some state governments had followed that excise duty cut with reduction in VAT. &quot;Why Delhi government has not reduced VAT,&quot; he asked.

Price of petrol and diesel in Delhi is the lowest in all metros.

Pradhan had said that Finance Minister Arun Jaitley has already written to the states seeking reduction in VAT.

The October 2017 excise duty cut cost the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year that ends on March 31, 2018.

The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government&#39;s excise mop-up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

State-owned oil companies in June last year dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Rates during the first fortnight starting June 16 dropped but have been on the rise since July 4.

Since then prices are revised on daily basis. Today, price of petrol went up by 12 paisa per liter and that of diesel by 18 paisa.&nbsp;

Petrol was selling at Rs 71.18 per litre in Delhi

Diesel prices have touched a record high of Rs 61.74 per litre and petrol prices have crossed Rs 71 as international oil rates continue to rally. Petrol price rose to Rs 71.18 per litre in Delhi today, the highest since August 2014, according to daily fuel price list of state-owned oil firms. Diesel prices soared to their highest level of Rs 61.74 per litre in Delhi. It is being sold at Rs 65.74 in Mumbai, where the local sales tax or VAT rates are higher. Prices have been on the rise since December 12, 2017. Diesel in Delhi on that day was priced at Rs 58.34, and in past one month has risen by Rs 3.4. Petrol price has during the period risen by Rs 2.09, according to oil companies. Two the most traded benchmark crude globally have risen the most since December 2014 - Brent touched USD 70.05 a barrel last week and WTI reached USD 64.77. The rally in oil prices has renewed calls to the government to cut excise duty to cushion burden on common man. The BJP-led NDA government has during its tenure cut excise duty only once - by Rs 2 per litre in October 2017 when petrol price had reached Rs 70.88 per litre in Delhi and diesel was priced at Rs 59.14. Because of the excise duty cut, diesel prices had on October 4, 2017 come down to Rs 56.89 and petrol to Rs 68.38. However, subsequent rally has wiped away all the gains and prices have touched new highs. Last week, Oil Minister Dharmendra Pradhan had responded to questions on whether the Centre would cut excise duty on the two fuel, by asking states to first cut VAT. "Why dont you ask state governments to reduce first," he said on January 1 responding to reporters question on excise duty cuts. "Government of India reduced excise duty (in October last year). We are appealing to states to reduce VAT." Some state governments had followed that excise duty cut with reduction in VAT. "Why Delhi government has not reduced VAT," he asked. Price of petrol and diesel in Delhi is the lowest in all metros. Pradhan had said that Finance Minister Arun Jaitley has already written to the states seeking reduction in VAT. The October 2017 excise duty cut cost the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year that ends on March 31, 2018. The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop-up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. State-owned oil companies in June last year dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Rates during the first fortnight starting June 16 dropped but have been on the rise since July 4. Since then prices are revised on daily basis. Today, price of petrol went up by 12 paisa per liter and that of diesel by 18 paisa.

Diesel prices hit record high of Rs 61.74 per litre, petrol crosses Rs 71

Oil prices were stable on Friday, held back by a strengthening U.S. dollar but supported by China&#39;s relentless thirst for crude amid the OPEC-led supply cuts that have already tightened the market this year.

US&nbsp;West Texas Intermediate (WTI) crude futures were at $56.68 a barrel at 0535 GMT, virtually unchanged from their last settlement at $56.69.&nbsp;Brent crude futures, the international benchmark for oil prices, were steady at $62.20 a barrel.&nbsp;

Traders said a stronger dollar, which has gained 0.9 percent this month against a basket of other leading currencies, was weighing on prices.&nbsp;A rising greenback attracts financial traders who switch investments in commodity futures and foreign exchange. A strong dollar is also seen by many as a brake on crude prices, as it makes dollar-denominated oil purchases more expensive in countries that use other currencies.

&quot;A strong U.S. dollar could act as a headwind to commodities&quot;, Bank of America Merrill Lynch (BoAML) said in its 2018 outlook.&nbsp;Despite this, China&#39;s booming oil demand will overtake the United States as the world&#39;s biggest crude importer, this year.

China&#39;s crude oil imports rose to 37.04 million tonnes in November, or 9.01 million barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed on Friday.&nbsp;&quot;China&#39;s crude oil imports will continue to rise over the coming years, as output declines from several of its giant onshore fields... This will inevitably see China become more reliant on crude oil imports over our forecast period, with import dependency set to increase from a record 68.0 percent in 2017 to nearly 80 percent by 2021&quot;, BMI Research said.

Bank of America Merrill Lynch, meanwhile, said healthy global demand and tight supplies should see Brent crude oil rise to $70 per barrel by mid-year.&nbsp;U.S. investment bank Jefferies said it expects 2018 global oil demand growth of 1.5 million bpd, driven by near 10 percent demand growth in China.&nbsp;

On the supply side, oil prices have been receiving support from the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers, most importantly Russia, which has been withholding supplies to tighten the market.&nbsp;Largely because of these voluntary production cuts, oil prices rose sharply between June and October, with Brent gaining around 40 percent in value.

Threatening to undermine OPEC&#39;s goal to tighten markets is U.S. oil production, which has risen by more than 15 percent since mid-2016 to 9.7 million barrels per day (bpd), the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.&nbsp;The EIA monthly data on U.S. crude production published November 30 was also somewhat bearish.

Oil prices in the world were stable on Friday as China's thirst for crude countered continuously strengthening U.S. dollar. It is speculated that China's booming oil demand will result in it becoming the world's biggest crude importer

Oil prices were stable on Friday, held back by a strengthening U.S. dollar but supported by China's relentless thirst for crude amid the OPEC-led supply cuts that have already tightened the market this year. US West Texas Intermediate (WTI) crude futures were at $56.68 a barrel at 0535 GMT, virtually unchanged from their last settlement at $56.69. Brent crude futures, the international benchmark for oil prices, were steady at $62.20 a barrel. Traders said a stronger dollar, which has gained 0.9 percent this month against a basket of other leading currencies, was weighing on prices. A rising greenback attracts financial traders who switch investments in commodity futures and foreign exchange. A strong dollar is also seen by many as a brake on crude prices, as it makes dollar-denominated oil purchases more expensive in countries that use other currencies. "A strong U.S. dollar could act as a headwind to commodities", Bank of America Merrill Lynch (BoAML) said in its 2018 outlook. Despite this, China's booming oil demand will overtake the United States as the world's biggest crude importer, this year. China's crude oil imports rose to 37.04 million tonnes in November, or 9.01 million barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed on Friday. "China's crude oil imports will continue to rise over the coming years, as output declines from several of its giant onshore fields... This will inevitably see China become more reliant on crude oil imports over our forecast period, with import dependency set to increase from a record 68.0 percent in 2017 to nearly 80 percent by 2021", BMI Research said. Bank of America Merrill Lynch, meanwhile, said healthy global demand and tight supplies should see Brent crude oil rise to $70 per barrel by mid-year. U.S. investment bank Jefferies said it expects 2018 global oil demand growth of 1.5 million bpd, driven by near 10 percent demand growth in China. On the supply side, oil prices have been receiving support from the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers, most importantly Russia, which has been withholding supplies to tighten the market. Largely because of these voluntary production cuts, oil prices rose sharply between June and October, with Brent gaining around 40 percent in value. Threatening to undermine OPEC's goal to tighten markets is U.S. oil production, which has risen by more than 15 percent since mid-2016 to 9.7 million barrels per day (bpd), the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia. The EIA monthly data on U.S. crude production published November 30 was also somewhat bearish.

Oil prices steady as Chinese demand counters stronger dollar

Global oil prices have fallen 52% since 2014, while Indian petrol prices have fallen just 1% in the same time

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Why are Indian prices not falling in line with global crude oil prices

Why haven't petrol and diesel prices in India fallen in line with crude oil prices? What is the rest of South Asia paying for their fuel?

Global oil prices have fallen 52% since 2014. And Indian petrol prices fall just 1%?

Brent crude oil prices rose above $51 a barrel on Friday to hit an eight-week high and was on track to rise for a seventh trading day, as hopes that producers could agree measures to support crude buoyed sentiment. 
 
International benchmark Brent crude oil futures were trading at $51.15 per barrel at 0618 GMT, up 26 cents from their last close. Brent prices remain in a bull-run that has lifted the market by over 20 percent since early August. Brent earlier hit $51.20. 
 
US West Texas Intermediate (WTI) crude futures, were at $48.67 a barrel, up 45 cents. 
 
&quot;Oil prices climbed higher because of the US crude stocks downtrend and positive market sentiment, led by OPEC talks. Oil ETFs and managed money also continued to bet on the oil rise recently,&quot; a Hong Kong-based trader said. 
 
Nigerian oil minister Emmanuel Ibe Kachikwu said on Thursday that while a cut in OPEC production is unlikely, there is hope a meeting of producers in Algeria next month could help shore up crude prices. 
 
US crude was also pushed up by an open arbitrage opportunity to export WTI to Europe, leading to a rush of new orders. 
 
However, analysts and traders warned the rally was overblown, especially since planned talks between the Organization of the Petroleum 
Exporting Countries (OPEC) and other major producers like Russia to rein in on ballooning overproduction were unlikely to lead to a reduced supply overhang. 
 
&quot;Some believe &ndash; or more appropriately, hope &ndash; that the OPEC may come up with a plan to support prices at its informal meeting next month, something which we doubt will happen,&quot; said Fawad Razaqzada, a market analyst at Forex.com. 
 
The market appeared to be approaching overbought territory, a Singapore-based trader said. 
 
&quot;Prices could potentially rise another $1 to $2 a barrel before they fall, but the market will need a catalyst to spark the selloff,&quot; the trader said.&nbsp; 
 
(Reuters)

The market hopes that oil producers could agree on measures that will support crude buoyed sentiment

Brent crude oil prices rose above $51 a barrel on Friday to hit an eight-week high and was on track to rise for a seventh trading day, as hopes that producers could agree measures to support crude buoyed sentiment. International benchmark Brent crude oil futures were trading at $51.15 per barrel at 0618 GMT, up 26 cents from their last close. Brent prices remain in a bull-run that has lifted the market by over 20 percent since early August. Brent earlier hit $51.20. US West Texas Intermediate (WTI) crude futures, were at $48.67 a barrel, up 45 cents. "Oil prices climbed higher because of the US crude stocks downtrend and positive market sentiment, led by OPEC talks. Oil ETFs and managed money also continued to bet on the oil rise recently," a Hong Kong-based trader said. Nigerian oil minister Emmanuel Ibe Kachikwu said on Thursday that while a cut in OPEC production is unlikely, there is hope a meeting of producers in Algeria next month could help shore up crude prices. US crude was also pushed up by an open arbitrage opportunity to export WTI to Europe, leading to a rush of new orders. However, analysts and traders warned the rally was overblown, especially since planned talks between the Organization of the Petroleum Exporting Countries (OPEC) and other major producers like Russia to rein in on ballooning overproduction were unlikely to lead to a reduced supply overhang. "Some believe – or more appropriately, hope – that the OPEC may come up with a plan to support prices at its informal meeting next month, something which we doubt will happen," said Fawad Razaqzada, a market analyst at Forex.com. The market appeared to be approaching overbought territory, a Singapore-based trader said. "Prices could potentially rise another $1 to $2 a barrel before they fall, but the market will need a catalyst to spark the selloff," the trader said. (Reuters)

Crude oil prices on a bull-run, cross $51 a barrel

After half a year of strong oil price rises, Asian crude demand is slowing and by some measures falling, and many market participants suspect it is not just a cyclical phenomenon, but also a product of more permanent structural changes.

With years of annual economic growth of 7-10 per cent in China and similar recent figures from India, Asia-Pacific has overtaken the Americas to become the world&#39;s biggest oil consuming region, accounting for almost 40 per cent of global demand.

But an industry that has come to rely on Asia&#39;s booming thirst for oil could soon be scratching around for growth.

Thomson Reuters Eikon data shows that Asian crude oil tanker imports have fallen, albeit from record levels, for four straight months and by 12 per cent since March to around 82 million tonnes (20 million barrels per day), slightly below last year&#39;s levels.

Much of the surprise decline is explained by conditions in China, the region&#39;s biggest consumer, accounting for 27 per cent of Asia-Pacific demand and 13 per cent of global demand.

With its long-term growth outlook now camped perhaps permanently below 7 per&nbsp;cent, most analysts expect vehicle sales in China will slow accordingly.

They have already slipped to 2.1 million at the end of May, down from a peak of almost 2.8 million in December 2015.

Refiners across Asia said that was starting to hit their business.

&quot;Asian oil demand growth is slowing down. China, Asia&#39;s largest market, is experiencing sluggish demand,&quot; said a South Korean refiner.

As domestic refiners sell off surplus fuel, China&#39;s exports of diesel and gasoline, the main refined fuels for industrial and passenger vehicles, have both soared.

&quot;Asia refiners have already started to pull back ... and there are reports of (oil) cargoes struggling to sell,&quot; said Adam Longson of Morgan Stanley this week in a note to clients, adding that demand in the third quarter could fall further.

Ship brokers say traders have started chartering supertankers to store supplies that consumers can&#39;t absorb.

One key pillar of recent demand is never coming back. Analysts think China has nearly finished building its strategic petroleum reserves (SPR).

Oil analysts at JPMorgan estimated in a note to clients last week that the SPR was now at 400 million barrels, which they believed was close to capacity.

&quot;Our model suggests a 15 per cent month-on-month decline in China&#39;s crude oil net imports in September, or a loss of 1.2 million barrels versus August and 0.8 million barrels less from the 12-month average,&quot; they said. 
&nbsp;

EFFICIENCY SAVINGS

Structural changes in demand are not limited to China.

For Asia&#39;s most developed oil markets, Japan and South Korea, analysts say long-term demand will steadily fall.

Japan&#39;s oil consumption, once 6 million barrels per day (bpd) and 10 per cent of global demand, has fallen to not much more than 3.5 million bpd, or under 5 per cent of world consumption. It will fall further as government consolidates its refiners.

&quot;There are various factors. Nuclear power generation has restarted, pushing down energy demand. When nuclear plants shut down (after the 2011 Fukushima disaster), Japan imported lots of crude. Other factors include shrinking population, saturated status of automobiles and efficiency improvement,&quot; said Kaname Gokon, strategist at brokerage Okato Shoji.

The situation is similar in South Korea.

&quot;Korea&#39;s oil demand is at a standstill, and demand is expected to decrease because of greenhouse gas emissions policy and alternative fuel. On top of that, if a growing number of people switch to use electric cars, oil demand is bound to fall,&quot; said Moon Young-seok, senior researcher at state-run Korea Energy Economics Institute.

Even in India, the industry&#39;s big hope to compensate for slower demand in China, demand for new cars is tepid.

While Indian motorbike sales remain strong, the number of new cars sold has fallen below 215,000 per month, down from almost 260,000 in October and well below the monthly record of just over 300,000 more than four years ago.

While industry doesn&#39;t expect Asian oil demand to decline outright, they say the growth seen over the past decade may never be revisited.

The fuel economy standards of new cars, which stagnated below 30 miles per gallon (mpg) between 1980 and 2010, have improved to around 40 mpg now and are expected to rise to mid-50 mpg by the early 2020s, according to industry estimates. That&#39;s without considering the rise of hybrid or pure electric vehicles.

&quot;Energy efficiency will play a huge role in slowing the growth in global demand, as energy use per unit of economic output is likely to fall by 40 per cent (between 2014 and 2040),&quot; US oil giant ExxonMobil says in its 2016 outlook. 
 
(Reuters)

The slowing Asian demand for crude is not just a cyclical phenomenon, but the product of more permanent structural changes

After half a year of strong oil price rises, Asian crude demand is slowing and by some measures falling, and many market participants suspect it is not just a cyclical phenomenon, but also a product of more permanent structural changes. With years of annual economic growth of 7-10 per cent in China and similar recent figures from India, Asia-Pacific has overtaken the Americas to become the world's biggest oil consuming region, accounting for almost 40 per cent of global demand. But an industry that has come to rely on Asia's booming thirst for oil could soon be scratching around for growth. Thomson Reuters Eikon data shows that Asian crude oil tanker imports have fallen, albeit from record levels, for four straight months and by 12 per cent since March to around 82 million tonnes (20 million barrels per day), slightly below last year's levels. Much of the surprise decline is explained by conditions in China, the region's biggest consumer, accounting for 27 per cent of Asia-Pacific demand and 13 per cent of global demand. With its long-term growth outlook now camped perhaps permanently below 7 per cent, most analysts expect vehicle sales in China will slow accordingly. They have already slipped to 2.1 million at the end of May, down from a peak of almost 2.8 million in December 2015. Refiners across Asia said that was starting to hit their business. "Asian oil demand growth is slowing down. China, Asia's largest market, is experiencing sluggish demand," said a South Korean refiner. As domestic refiners sell off surplus fuel, China's exports of diesel and gasoline, the main refined fuels for industrial and passenger vehicles, have both soared. "Asia refiners have already started to pull back ... and there are reports of (oil) cargoes struggling to sell," said Adam Longson of Morgan Stanley this week in a note to clients, adding that demand in the third quarter could fall further. Ship brokers say traders have started chartering supertankers to store supplies that consumers can't absorb. One key pillar of recent demand is never coming back. Analysts think China has nearly finished building its strategic petroleum reserves (SPR). Oil analysts at JPMorgan estimated in a note to clients last week that the SPR was now at 400 million barrels, which they believed was close to capacity. "Our model suggests a 15 per cent month-on-month decline in China's crude oil net imports in September, or a loss of 1.2 million barrels versus August and 0.8 million barrels less from the 12-month average," they said. EFFICIENCY SAVINGS Structural changes in demand are not limited to China. For Asia's most developed oil markets, Japan and South Korea, analysts say long-term demand will steadily fall. Japan's oil consumption, once 6 million barrels per day (bpd) and 10 per cent of global demand, has fallen to not much more than 3.5 million bpd, or under 5 per cent of world consumption. It will fall further as government consolidates its refiners. "There are various factors. Nuclear power generation has restarted, pushing down energy demand. When nuclear plants shut down (after the 2011 Fukushima disaster), Japan imported lots of crude. Other factors include shrinking population, saturated status of automobiles and efficiency improvement," said Kaname Gokon, strategist at brokerage Okato Shoji. The situation is similar in South Korea. "Korea's oil demand is at a standstill, and demand is expected to decrease because of greenhouse gas emissions policy and alternative fuel. On top of that, if a growing number of people switch to use electric cars, oil demand is bound to fall," said Moon Young-seok, senior researcher at state-run Korea Energy Economics Institute. Even in India, the industry's big hope to compensate for slower demand in China, demand for new cars is tepid. While Indian motorbike sales remain strong, the number of new cars sold has fallen below 215,000 per month, down from almost 260,000 in October and well below the monthly record of just over 300,000 more than four years ago. While industry doesn't expect Asian oil demand to decline outright, they say the growth seen over the past decade may never be revisited. The fuel economy standards of new cars, which stagnated below 30 miles per gallon (mpg) between 1980 and 2010, have improved to around 40 mpg now and are expected to rise to mid-50 mpg by the early 2020s, according to industry estimates. That's without considering the rise of hybrid or pure electric vehicles. "Energy efficiency will play a huge role in slowing the growth in global demand, as energy use per unit of economic output is likely to fall by 40 per cent (between 2014 and 2040)," US oil giant ExxonMobil says in its 2016 outlook. (Reuters)

Oil industry losing burn of Asian demand

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