BP: US Beats China's Oil Demand Growth in 2013

At the same time, a Chinese slowdown was driven mainly by lower consumption of diesel and gasoil, which traditionally reflect the rate of economic growth.

"It is easy to understand the U.S. - If you have a lot of cheap domestic oil that feeds into the industry, it will show up eventually in GDP growth numbers. It's not that easy to reconcile the slowdown in Chinese energy numbers," Ruhl said.

China's economic growth hit a 14-year low in 2013, a decline that accelerated in the first part of this year as Beijing leads a wide drive to reform the country's economy.

Overall, China's energy consumption growth slowed to around 4.7 percent in 2013 from a 10-year average of 8.4 percent despite the fact that Beijing officially reported a 7.7 percent rise in gross domestic product last year, Ruhl said.

"There is a lot of tension between the official growth numbers for China and the official energy consumption numbers for China," he said.

Global oil production - up 560,000 bpd, or 0.6 percent - failed to keep pace with growth in oil consumption. Output disruptions from Libya, Nigeria and Iraq due to political strife were almost entirely offset by growth of 1.1 million bpd in U.S. output, BP said.

"The huge investments seen in the U.S. have been encouraged and enabled by a favourable policy regime. And this has resulted in the U.S. delivering the world's largest increase in oil production last year. Indeed, the U.S. increase ... was one of the biggest annual oil production increases the world has ever seen," Ruhl said.

This balance also explains oil price stability over the past three years, with the lowest volatility since the early 1970s, he said.


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