More Demand for Fuel is the Truth
Afew months ago, Vitol Asia president Mike Muller revealed some interesting numbers concerning the oil & gas demand in the world during the Middle East Petroleum & Gas Conference in Dubai. He said, “We are going into the second half of the year where, largely thanks to Asian demand growth, the world is going to need about 2 million barrels per day more than it needs now”.
Perhaps fossil fuel doesn’t have a bright future in the world, but its present is rather healthy. Despite the Russia-Ukraine conflict and subsequent crunch of the fuel supply, the gasoline demand in Europe recorded the strongest this year since 2015 (January-to-June period), according to Bloomberg calculations based on government data. If the UK set itself back eight years, the demand hit a 20-year high in France during the summer. It’s risen to the highest in over a decade in Spain. The case is no different in Eastern European nations like Poland. The gasoline use in Europe is the strongest ever.
As the supply from Russia is slashed, the Asian energy companies continue to establish and draw up blueprints for LNG trading desks to take advantage of Europe’s new position as the world’s biggest importer of super-chilled fuel. Almost all of Asia’s giant energy companies have plans in motion, including Japan’s Tokyo Gas, Osaka Gas, and Kansai Electric and South Korea’s SK E&S. Indeed, reports indicate that China’s ENN, Cnooc, PetroChina, and Sinochem are also considering moves to the UK. The potential of bigger returns selling to European customers, typically utility groups, than in Asia is tempting companies to the UK capital. Trading profits in Europe were extremely lucrative last summer as the region scrambled to secure the fuel to fill up its storage ahead of winter. It’s fair to expect that more energy companies will follow the trend.