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Page 1 of 2 News / Commodities
Rising world oil prices have been hogging the headlines lately, as we have been continuously bombarded with weekly increases in local pump prices. As we all know, any rise in pump prices has a corresponding rise in basic commodities and fares of public utility vehicles. But lately, we are getting the feeling that headlines about world consumption of oil being high due to the supposedly large demand by China are a bit exaggerated. Remember that crude oil prices are subject to much speculation because a lot of funds continue to invest in commodities. But as we can see in the tables, we believe there is already a mispricing in the market. Oil Consumption | (Thousand Barrels Daily as of YE 2007) | (Thousand Barrels Daily as of YE 2007) | | | Source : British Petroleum Report | | | 2007A | % Total | % Growth | North America (US Canada Mexico) | 25,024 | 29.36% | 0.40% | South and Central America | 5,493 | 6.45% | 5.00% | Europe and Eurasia | 20,100 | 23.59% | -2.00% | Middle east | 6,203 | 7.28% | 4.40% | Africa | 2,955 | 3.47% | 4.60% | Asia Pacific | 25,444 | 29.86% | 2.30% | Total | 85,219 | | 1.10% | | | | | | US Only | 20,687 | 24.28% | -0.10% | Japan | 5,051 | 5.93% | -3.50% | Europe Only | 16,254 | 19.07% | -4.88% | China (Inc HK) | 8,196 | 9.62% | 4.86% | India | 2,748 | 3.22% | 6.70% | Russian Federation | 2,699 | 3.17% | -0.90% | BRIC (Brazil, Russia, India China) | 15,835 | 18.58% | 4.27% | Philippines | 298 | 0.35% | 2.80% | As you can see from the tables, a continued increase in demand from China would have limited impact on the supply and demand situation particularly if we factor in the projected decline in demand in the US and in other G3 countries (Japan and Eurozone). The forecast used in this assumption is based on consensus estimates compiled by the International Energy Association or IEA. Impact to Global (Simulation) | % Growth | Impact to total | % to Total | | | | | | China (Inc HK) | 5.00% | 0.48% | 9.62% | India | 7.50% | 0.24% | | Russian Federation | -1.00% | -0.03% | | BRIC (Brazil, Russia, India China) | 5.00% | 0.93% | 18.58% | | | | | | US | -1.20% | -0.35% | | Europe | -6.00% | -1.14% | | Japan | -4.00% | -0.24% | | G3 | | -1.73% | 49.28% | | | | | | Net Effect (BRIC Less G3 ) | | -0.80% | 67.86% |
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