Indian diesel and gasoline demand both set all-time highs in May, according to a new report from Standard Chartered, which was sent to Rigzone recently.
“Indian oil demand was strong in May, rising 246,000 barrels per day month on month to 5.187 million barrels per day, a year on year increase of 459,000 barrels per day (9.7 percent) and 220,000 barrels per day higher than our forecast,” analysts at Standard Chartered stated in the report.
“Diesel demand rose above two million barrels per day for the first time, adding 12.8 percent year on year to 2.02 million barrels per day, while gasoline demand rose 11.0 percent year on year to 918,000 barrels per day, also an all-time high,” the analysts added in the report.
Total demand in the year to date has increased 257,000 barrels per day, according to the analysts, who noted that, while this is in line with their full-year forecast growth of 254,000 barrels per day, they now see some upside risk given the May outperformance, “particularly given the strength of diesel and gasoline demand”.
“We have previously noted the apparent disconnection between oil economists, 2023 demand has surprised them on the upside, and many oil traders, who think demand is disappointing on persistent macro-related fears,” the analysts said in the report.
“India’s May data joins U.S. demand revisions in emphasising this disconnection,” the analysts added.
In a separate report sent to Rigzone on June 6, analysts at Standard Chartered outlined that the latest Energy Information Administration (EIA) weekly data at the time was bearish according to Standard Chartered’s U.S. oil data bull-bear index.
“Demand indications slipped back after a strong showing in the previous week’s EIA data,” the analysts said in the June 6 report.
“Implied demand was lower week on week for every product except jet fuel, with gasoline demand lower by 339,000 barrels per day at 9.098 million barrels per day and distillate demand lower by 552,000 barrels per day at 3.646 million barrels per day,” the analysts added.
“However, both of these products maintained narrow year on year increases for the first 25 days of May, with gasoline demand 44,000 barrels per day higher (0.5 percent) and distillate demand 21,000 barrels per day higher (0.5 percent),” they continued.
India’s Future Demand
According to the EIA’s latest short term energy outlook, which was released in June, India’s petroleum and other liquids consumption will average 5.41 million barrels per day in the second quarter of this year. First quarter demand averaged 5.26 million barrels per day and 2022 consumption averaged 5.04 million barrels per day, the STEO showed.
Looking further ahead, the STEO projects that India’s petroleum and other liquids consumption will come in at 5.05 million barrels per day in the third quarter of this year, 5.37 million barrels per day in the fourth quarter, 5.63 million barrels per day in the first quarter of 2024, 5.70 million barrels per day in the second quarter of 2024, 5.33 million barrels per day in the third quarter, and 5.66 million barrels per day in the final quarter of next year. The STEO expects consumption to average 5.27 million barrels per day in 2023 and 5.58 million barrels per day in 2024.
The EIA’s previous STEO, which was published in May, projected identical demand rates for India.
“Global liquid fuels consumption in our forecast increases by 1.6 million barrels per day in 2023 and by 1.7 million barrels per day in 2024, and most expected liquid fuels demand growth is in non-OECD Asia, led by China and India,” the EIA noted in its May STEO.
“We expect this demand growth will bring the global oil market into balance between the third quarter of 2023 and 1Q24 and push the Brent price from current levels back to between $75 per barrel and $80 per barrel,” the EIA added in that STEO.
In its latest oil market report, which was released earlier this month, the International Energy Agency (IEA) stated that global oil demand continues to defy the challenging macroeconomic climate and noted that it is set to rise by 2.4 million barrels per day in 2023.
“China accounts for 60 percent of the gains, with soaring transport and petrochemical use propelling apparent demand in April to an all-time high of 16.3 million barrels per day,” the IEA said in that report.
“Indian demand is equally robust with the latest readings for May showing both gasoline and diesel breaking records,” the IEA added.
In its May oil market report, the IEA noted that record demand in China, India, and the Middle East at the start of the year more than offset lackluster industrial activity and oil use in the OECD.
To contact the author, email andreas.exarheas@rigzone.com
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