Oil consumption grew

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Oil consumption
Oil consumption grew by 0.9 million barrel per day (b/d), or 0.9% slightly lower than the 10-year average of 1.3%. Growth was led by China, where demand rose by 680,000 b/d, the largest increase in the country’s demand since 2015.

Elsewhere in the developing world, growth was below-average, with Iran (180,000 b/d or 10%) the only major exception. OECD demand fell by 290,000 b/d, the first decline since 2014.

By product, consumption growth was led by ethane and LPG (380,000 b/d), helped by the substitution of naphtha in petrochemicals, with naphtha demand down slightly (-15,000 b/d). Diesel grew a little above average (360,000 b/d) as preparations for the International Maritime Organisation’s bunker fuel sulphur specification in 2020 lifted marine diesel demand. In contrast, this shift reduced demand for high sulphur fuel oil, contributing to a 320,000 b/d decline in fuel oil consumption.

Oil production
Oil production fell slightly by 60,000 b/d in 2019 as strong non-OPEC production growth, led by the US, was offset by a sharp decline in OPEC production.

The US posted the largest increase of any country for the third consecutive year, with its output rising by a massive 1.7 million b/d, although this was down from the record increase in 2018 (2.2 million b/d). There was also significant growth from Brazil (200,000 b/d) and Canada (150,000 b/d), although, in the latter’s case, this was a pronounced slowdown in growth compared to 2017 and 2018.

OPEC production fell by 2 million b/d, the group’s steepest decline since 2009. Much of this decline was driven by a combination of sanctions and economic difficulties in Iran (-1.3 million b/d) and Venezuela (-560,000 b/d). In addition, a renewed OPEC+ production cut agreement reduced other countries’ output levels, with Saudi Arabia’s production falling (430,000 b/d). Despite this agreement, the production of some OPEC members increased, notably Iraq and Nigeria which increased their production by 150,000 and 100,000 b/d respectively.

Looking at oil production by type, declines were concentrated in crude oil and condensate, which together fell by 580,000 b/d. Natural gas liquids (NGLs) continued to grow robustly, by 520,000 b/d (4.5%), in-line with its long-run trend. As has been the case in the last few years, NGLs output growth was driven primarily by the US (440,000 b/d), which has doubled its production between 2012 and 2019 to 4.8 million b/d.

Sources
BP estimates have been compiled using a combination of primary official sources, third-party data from the OPEC Secretariat, World Oil, Oil & Gas Journal, and independent estimates of Chinese reserves based on official data and information in the public domain. Canadian oil sands ‘under active development’ are an official estimate. Venezuelan Orinoco Belt reserves are based on the OPEC Secretariat and government announcements.