US demand for oil grew by more than China’s last year for the first time since 1999 according to the International Energy Agency, in a startling indication of how abundant energy supplies are driving economic resurgence in America.
The IEA – the rich world’s energy club whose forecasts are the gold standard for the energy market – said US oil demand grew by 390,000 barrels a day or 2 per cent last year, reversing years of steady decline.
Chinese demand grew by 295,000 b/d – which would be the weakest in at least six years.
Oil demand figures are major indicators of economic growth, because fuels such as gasoline and diesel indicate the strength of industrial and consumer activity.
As China’s economy has boomed over the past decade its oil demand has surged, while demand in the US has fallen sharply since the financial crisis.
But as new drilling techniques help America unlock shale oil and gas reserves, the country’s consumption of oil fuels is rising sharply again.
Antoine Halff, head of oil market research at the IEA, said: “It is clear that that US economy is rebounding very strongly thanks to its energy supplies.”
“Sometimes oil is a lagging indicator, but sometimes it is the opposite and shows that an economy is growing faster than thought.”
The IEA said that US demand growth was driven by industrial fuels including propane and liquefied petroleum gas, as well as petrochemicals, and indicated a pick up in industrial activity in the US.