The Brent oil price bounced hard last night as the EIA upped its demand forecasts for the next two years. Brent jumped to $45.46 while Henry Hub gas rose solidly to $2.16mmBtu:
Here’s the EIA:
Many of the same drivers that prompted revisions to 2015 demand growth rates are expected to continue affecting demand in the forecast period. China’s consumption is forecast to grow by 0.4 million b/d in both 2016 and 2017. EIA expects that China’s demand for HGL will continue to grow at a fairly steady pace as additional PDH plants come online, including Oriental Energy’s plant in Zhejiang and Haiwei’s plant in Hebei. Gasoline and jet fuel consumption is also expected to grow in 2016. Similarly, EIA expects continued strength in India’s consumption growth through the forecast period, particularly transportation fuel consumption, which is expected to drive year-on-year increases of 0.3 million b/d in both 2016 and 2017.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
