Demand for crude oil

Demand for crude oil to remain high due to increasing world population

Some good news for those looking to get a job on an oil rig. Oil demand is one of the most closely scrutinized financial sectors in the world. Energy companies are some of the largest corporations on earth. Governments can succeed or fail based solely on the basis of their crude oil exports. Because of this, oil production and consumption is one of the most closely measured sets of data in the world.

In the western world crude oil consumption per person peaked in the 1970s. Each person has been consuming slightly less oil per year fairly steadily for decades throughout North America, Europe, and Australia. But per capita consumption of crude oil has yet to peak in any major Asian country. While the per capita usage has been increasing slowly since the early 1980s, it has yet to stop increasing in India, Pakistan or China.

Despite the very small overall increase in worldwide per capita crude oil consumption, overall oil demand increases almost every single year. And that’s because the population of the world continues to increase at a rate faster than any other time in human history.

And with an increase in population comes an increase in oil demand, despite per capita usage remaining mostly stable.

In the mid 20th century a barrel of oil cost only a couple of dollars. Even when adjusted for inflation the cost per barrel was only about 20 dollars But in the mid 1970s as the demand in the US and Europe started levelling out the cost skyrocketed to nearly 70 dollars per barrel. At that time it peaked at an inflation adjusted price of nearly 120 dollars per barrel in 1979. But at that time the world population was just a bit north of 4 billion.

By the year 2000 the world population was nearly 6 billion people, with another one billion added before 2015.

Crude oil peaked in 2008 at an inflation adjusted price of $134 per barrel. Since then it has maintained fairly steadily above $100 per barrel and isn’t expected to drop any time soon. Despite increased production to a huge increase in drilling companies expanding their operations due to good prospects in the worldwide demand for oil, the price continues to stay very high. The booming world population, fuelled greatly by the massive increase in oil consumption throughout Asia, is expected to keep oil demand very strong far into the future.

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