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UNDER WATER TORRENT
OIL DEMAND:
Global Economy Disruptive Technology
01 02
2
Global Economy Disruptive Technology
01 02
3
01 Global Economy
ECONOMIC GROWTH REMAINS SUPPORT IN TO OIL DEMAND
-5%
0%
5%
10%
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Oil Demand Growth (YoY) [LHS] GDP Growth [RHS]
MMBD GLOBAL OIL DEMAND VS. GDP GROWTH
Sources: IEA, EIA, OPEC and IMF 4
01 Global Economy
2019 GLOBAL ECONOMY DRIVEN BY DEVELOPING ECONOMIES
2.3 2.4
[VALU…
2017 2018 2019
% Growth
4.7 4.7
[VALU…
2017 2018 2019
Developing Economies
3.7 %
Sources: IMF
% Growth
5
01 Global Economic
GLOBAL OIL DEMAND GROWTH MAINLY DRIVEN BY ASIA
Sources: IEA, EIA, OPEC
GLOBAL OIL DEMAND GROWTH
Unit: KBD
2017/2018/2019
200 350
180
America
Africa 24 81 30
Europe 244
147 53
Middle East 31 47
152
891 613 650 Asia Asia
America
6
01 Global Economic
GLOBAL OIL DEMAND GROWTH MAINLY DRIVEN BY ASIA
Sources: IEA, EIA, OPEC
GLOBAL OIL DEMAND GROWTH
Unit: KBD
2017/2018/2019
200 350
180
America
Africa 24 81 30
Europe 244
147 53
Middle East 31 47
152
891 613 650 Asia
7
U.S. Unemployment Rate
2008 2010 2012 2014 2016 2018
fallen to
3.7%
270
400
140
2017 2018 2019
ECONOMIC EXPANSION
OIL DEMAND GROWTH
UNIT : KBD
2.9 2.5 2018 Growth
% % VS.
2019 Growth
Sources: IEA, EIA, OPEC and IMF
01 Global Economic
U.S. ECONOMY AND DEMAND GROWTH IN 2019
EXPANDING AT HEALTHY PACE AMID TIGHTENING LABOR MARKET
U.S. Car Sales & Miles Driven
+0.3% Car Sales Miles Driven
+ 1-2 % (Jan-Sep’18)
Consumer Spending
+2.1% (Jan-Sep’18)
Spending remains STRONG and DRIVING DOMESTIC OIL CONSUMPTION
8
01 Global Economic
UNCERTAINTIES UNDER TRADE DISPUTE FROM U.S. POLICY
Redefining Global Trade
NAFTA agreement renegotiation
Pull out from Trans-Pacific Partner
Steel and Aluminum Tariff
Next step , Deficit trade with China
In 2017, U.S. import from China $505 bn
China only import from US $130 bn
9
01 Global Economic
TIME LINE AND IMPACT FROM TRADE WAR
15 Nov Round 1
started on Apr,2018
$U.S. 8.5 billion
30 Nov
TIMELINE OF U.S.- CHINA TRADE DISPUTES
Round 2
started on Jul,2018
$U.S. 4 billion
Round 3
started, Sep,2018
$U.S. 25 billion
China US$6 billion
G20 meeting
IMPACT OF TARIFF
Panic in Financial Markets
New global trade balance
SHORT-TERM IMPACT
0.2-0.4 %
Economic Impact on GDP
MEDIUM-TERM IMPACT
10
01 Global Economic
U.S. FED RATE HIKES ARE TRUMP’s ‘BIGGEST THREAT’
FED REMAINS ON TRACK TO RAISE RATES
Sources : Reuters, IMF, Bloomberg
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Oct/16 Feb/17 Jun/17 Oct/17 Feb/18 Jun/18 Oct/18
0
2
4
6
8
10
12
Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
FED’s tightened policy pushes high lending rate and suppress
U.S. business spending.
U.S. Private Investment $ bn Former FED Chairman
Current FED Chairman
U.S. Interest rate
11
01 Global Economic
GLOBAL OIL DEMAND GROWTH MAINLY DRIVEN BY ASIA
Sources: IEA, EIA, OPEC
GLOBAL OIL DEMAND GROWTH
Unit: KBD
2017/2018/2019
200 350
180
America
Africa 24 81 30
Europe 244
147 53
Middle East 31 47
152
891 613 650 Asia
12
Sources: IEA, EIA, OPEC and IMF
01 Global Economic
CHINA ECONOMIC AND OIL DEMAND OUTLOOK
SUSTAINABLE GROWING DURING REFORMS
496 510 471
2017 2018 2019
ECONOMIC EXPANSION
OIL DEMAND GROWTH UNIT : KBD
6.6 6.2 2018 Growth
% % VS.
2019 Growth
Economic Transition : Shift in China’s economy
35%
45%
55%
2006 2008 2010 2012 2014 2016 2018
Service
Manufacturing
Key Sectors Drive Oil Demand in 2019
+4.0% Transportation
Residential & Commercial
+2.5%
“Made In China”
by 2025
19th National Congress:
13
Sources: IEA, EIA, OPEC and IMF
01 Global Economic
INDIA ECONOMIC AND OIL DEMAND OUTLOOK
CONTINUOUS ECONOMIC GROWTH TO DRIVE DEMAND
150 250 200
2017 2018 2019
ECONOMIC EXPANSION
OIL DEMAND GROWTH UNIT : KBD
7.3 7.4 2018 Growth
% % VS.
2019 Growth
Make in India
Key Sectors in 2019
Encourage domestic companies and multinationals to manufacture in India
+7.0% Transportation
Residential & Commercial
+4.1%
Expanding Middle Class
14
Global Economy Disruptive Technology
01 02
15
Global Economy Disruptive Technology
01 02
16
02 Disruptive Technology
CLEARER POLICY COMMITMENT
195 nations Agreed to fight CO2
“WELL BELOW 2⁰C”
Keep Global Temperature Increase
by 2100
&
No defined punishment for breaking the agreement
No clear detail on how these countries should do
RISK OVER BAILING ON
THE PARIS CLIMATE DEAL
17
02 Disruptive Technology
SLOW PENETRATION OF DISRUPTIVE TECHNOLOGY
ONLY 1% OF OIL TO BE DISPLACED BY EV IN 2025
2019 ICE sales 90 Millions Cars
Only 2% or 2 millions are EVs Sources: Bloomberg
90.0
94.0
98.0
102.0
106.0
2015 2017 2019 2021 2023 2025
Oil Demand Oil Demand Displacement by EV
GLOBAL OIL DEMAND MBD
18
02 Disruptive Technology
BIG BARRIERS OF EV DEVELOPMENT
Country Policy
Emission standards Waivers on access restrictions Purchasing incentives
Consumer Consumer awareness Consumer trend for disruptive
innovation
Technology Battery costs and lifetime Charging infrastructure Range limits 01
02 03
19
CONCLUSION : OIL DEMAND GROWTH
Global Economy
Driven by developing economies
Disruptive Technology Big barriers on EVs adoption
2019 OIL DEMAND GROWTH 1.1 – 1.3 MMBD
20