London — US oil demand surged 500,000 b/d last year, the biggest increase in more than a decade as the country's new wave of petrochemical plants soaked up more of its fast-rising, shale-sourced ethane production, BP said Tuesday.
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Register NowThe world's biggest oil consumer saw demand for crude and liquids rise 2.5% to 20.46 million b/d in 2018, accelerating a trend of rising oil demand since a recent trough in 2009, BP said in its annual Statistical Review.
The figures showed the US was harnessing more value from its shale-led oil and gas supply boom and the rise of petrochemicals as a key plank in the future world oil demand outlook.
"The increased importance of petrochemicals in driving oil demand growth was also evident in the global production breakdown, with products most closely related to petrochemicals accounting for around half of the overall growth in demand," BP's chief economist, Spencer Dale, said while presenting the review.
The US became the world?s top exporter of ethane in 2015, surpassing Norway, the only other country to ship ethane internationally, according to the US's Energy Information Administration. Since then, a raft of petrochemical steam crackers, fed by ethane, have been commissioned, mostly on the Texas Gulf Coast and focused on export markets.
US ethane production alone, which is separated from raw natural gas at processing plants, surged 20% last year to 1.71 million b/d, EIA data showed.
Growing oil demand from the US petrochemicals sector meant the country has become an 'outlier' within the developed, high-income OECD economies, Dale said, noting that OECD oil demand resumed a decline trend in 2018 as oil prices firmed.
Shale alive and kicking
US production of tight oil and natural gas liquids from shale plays jumped 2.2 million b/d last year, BP said, while shale gas acreage saw US gas production surge 86 Bcm, or 12%.
In both oil and gas, US hydrocarbon growth marked the biggest ever annual output increase by any country, Dale said.
"What you saw last year was really quiet amazing, a unique double first for the US," Dale told reporters ahead of the presentation.
"In case there was any doubt, the US shale revolution is alive and kicking."
Overall, global oil demand grew by an above-average 1.4 million b/d, or 1.5%, to 99.84 million b/d last year, BP said, a slowdown from 1.7 million b/d growth seen in 2017.
China saw the biggest oil demand growth at 700,000 b/d, while India rose by 300,000 b/d, with the developing economies together making up two thirds of of the global increase.
BP's oil demand figures, which include biofuels and GTL consumption, are higher than the International Energy Agency which last month trimmed its 2018 oil demand estimate by 70,000 b/d to 1.2 million b/d.
-- Robert Perkins, robert.perkins@spglobal.com
--Edited by Dan Lalor, daniel.lalor@spglobal.com