Wednesday, July 1, 2009

And What About Chinese Oil Demand?

(Hat tip: Eric J. Fox)

Stock Market Prognosticator had this snippet on Chinese oil demand. Take an ambien and relax=)

Well so much for demand for Energy from China. This demand growth has always been hyped by Energy bulls, but as I and many others have stated previously, what really matters is demand growth from the the U.S. and other industrialized nations.

Here is how the math works:Oil demand in 2009 for the OECD countries is 45.2 million barrels per day, down 2.3 million barrels per day from 2008.China oil demand is 7.9 million barrels per day. Let's assume that it grows at 5% a year, or about 400,000 barrels per day.

As you can see, the fall in demand from the OECD easily wipes out demand growth from China by a factor of at least five.

- Brewskie

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