Much of the world is paying attention to the oil inventories and demand figures coming out of the US and other OECD nations. While the OECD accounts for a big portion of global demand, that number has been shrinking since the 1990s.
This is why oil prices only crashed to about $30/bbl when OECD demand crashed last year. And this is why the price today is $80/bbl despite soft OECD demand. The trade winds have shifted and we live in a new world.
The only question now is, when will the ‘emerging markets’ lose the word ‘emerging’?
Jeff Rubin rightly points out in a G&M article that the world should be shifting its attention to EM economies if it wants to predict the future of oil:
Just as the developing world has long surpassed the developed world in terms of coal consumption, the same is about to happen with respect to oil. Between explosive growth in oil-thirsty economies like China and India, and OPEC’s voracious appetite for its own fuel, OECD fuel markets are becoming increasingly marginal.
