HOUSTON (ICIS)--World oil demand has approached 100m bbl/day for the first time, driven by strong global economic growth, the American Petroleum Institute (API) said in its Q2 2018 industry outlook report on Thursday.
Meanwhile, US supply growth has been “up to the challenge”, meeting virtually all global oil demand growth so far in 2018, said API chief economist Dean Foreman.
As of May, US petroleum supply has risen by more than 2.0m bbl/day from the same month last year, and recent drilling activity increases continue to position the US for further supply gains this year, according to API’s report.
As for ethane, prices remained low even as exports and petrochemical demand increased, API’s report said.
“Ethane has been the largest growing component of natural gas liquids production and is the reason petrochemical firms are investing in the US as it has remained inexpensive compared with competing fuels,” it said.
Despite low ethane feedstock costs, US real ethylene prices and margins fell to eight-year lows as new supply capacity came onstream, the report added.
In the report, API also noted that “third-party consensus” suggested slower global economic growth for the next two years.
“Solid performance [is] belied by weakened expectations, particularly for the US and with trade barriers,” the group said.