The FT has noted the steadily falling price of oil in an article published this morning
There are three issues in play.
The first is that demand for oil is falling. Electric cars and high speed rail are tipping the balance against it.
The International Energy Authority:
Commentary — 12 September 2024
Amid an abrupt deceleration in Chinese oil consumption, global demand growth is cooling sharply from the rates seen in recent years, which we have been projecting since our first forecast for 2024 was published in June 2023. World oil demand is on course to increase by 900 000 barrels per day (b/d), or 0.9%, in 2024 and 950 000 b/d next year, down from 2.1 million b/d, or 2.1%, in 2023.
Global oil demand is increasing.
To remind, this man teaches at a British university.
You could publish celebrated 40-volume encyclopedias full of interesting facts Ritchie doesn’t know.
So demand for oil is increasing, but more slowly than previously because:
The slow growth in global oil demand was attributed to the weakening of the Chinese economy. Demand for oil in China has decreased for four months in row this year. The IEA expects it to begin rising again, but at a slower pace than in recent years because of the country’s progress in removing fossil fuels from its transport sector.
A surge in electric vehicle (EV) sales in China has reduced the country’s demand for road fuels, while the government’s rollout of a vast national high-speed rail network has begun to reduce growth in domestic air travel, according to the report.
Remember that 25,000 miles of railtrack and crazy cheap deals on brand new electric cars for £6K we were talking about recently? Not all Rice Krispies and stickyback plastic.
I don’t have the numbers to hand, but would guess the major determinant is the Chinese economy wobbling towards recession, I wouldn’t expect private car use to be an enormous % of Chinese fuel use but maybe somebody knows better.
Kek:
Fossil fuel share of total energy supply in 1973 was 87%!
After spending trillions of dollars to reduce dependence on fossil fuels over 50 years, global dependence on fossil fuels in 2022 was about 82%!
Here is the shocker: It increased in 2023 to 83.8%
Source: The Energy Institute, 2024.
https://x.com/anasalhajji/status/1835630419544330647
I was going to mock his assertion that EVs and HS rail were making much of an impact, but it appears they are – in China. So, all it takes for these 2 wonderful forms of transport that the lefties want us all to embrace is – full-on hard-core Communism! Of course, you also get slave labor, organ harvesting, limits on how many children you are allowed to have, etc. But – EVs and HS rail take-up finally start to approach the 5-year plan!
Well, he does assert that the government has been practicing austerity after all.
He makes this assertion based on increases in spending being smaller than previously projected, not that there’s less spending.
So a lower than projected increase in oil demand likely counts as lower demand in his eyes.
@Steve – the stuff you quote above is bollocks but your surmising is correct.
China has a rapidly-rising number of EVs on the road but they are still only 5% of the total. The drop in oil consumption is more likely to be due to the ongoing slump in construction and manufacturing as well as sluggish domestic consumption and exports.
I don’t know how the pricing works out but it may be that EVs powered by cheap coal-fired electricity are more cost effective than ICEs. And of course more EVs means more pleasant cities, unlucky for the peasants who live near the coal plants.
China domestic air travel this year has been above pre-pandemic levels.
China may have reduced the rate of increase in oil usage but that doesn’t mean it isn’t still increasing fossil fuel usage overall. From 2 years ago:
But who the hell knows what’s going on in China given that all stats are effectively state secrets. Even this guy is being frozen out and Chinese officials used to use his stats as they were more reliable than those generated by local bureaucrats.
https://www.chinabeigebook.com/
Marius – makes sense.
I don’t know how the pricing works out but it may be that EVs powered by cheap coal-fired electricity are more cost effective than ICEs
Not sure either, but EVs are pretty much just laptops on wheels.
Electronically, they’re vastly more complicated than ICE, but mechanically they’re far simpler. And electronics are cheap, in large part thanks to China.
But also there’s a huge misallocation of resources which benefits EV customers, the Chinese are heavily subsiding their EV industry, so end customers can drive off with brand new cars for £6K. Surprisingly, they’re not total shit, which is why the EU and US are so badly spooked.
Most urban dwellers would probably be fine with a cheap Chinese runabout.
I find that for runs Indians are more reliable than Chinese
BF – or one of those kebab places that only seems like a good idea when you’re drunk.
Staring through the kebab shop window at the lamb rotating on the spit is the closest I’ve ever come to watching pole dancing.
Surprisingly, they’re not total shit,
I’ve never driven one, but I have been a passenger in both Tesla and BYD EVs. The latter felt more solid and better-finished.
Steve,
“Surprisingly, they’re not total shit, which is why the EU and US are so badly spooked.”
The process of car making was pretty much perfected 20 years ago by Toyota and Honda and everyone copied them. Lots of automation, lots of tools so you can almost have retards doing things like fitting seats. And then they copied it, so you have Turks and Mexicans doing it. And then everyone copied Toyota and Honda, so European cars, Malaysian cars, Korean cars are all pretty good. If those guys can do it, why can’t the Chinese?
People have this idea that car making is still some super special thing, like it’s some cutting edge or craft thing that is the future of their nations, rather than a really boring mature product that’s about as interesting as a microwave oven.
Steve, China produces about 30% or more of the cars in the world, and exportsonly about 3%,,,,,,,,they are not getting around entirely on bikes any more. E Vs are now about 40% of new registrations. Government encourages EVs by basically giving free registration t
to them. November last year67000 vehicles registered in Shanghai for the month, only a third ICE , two thirds EVs,
Car making *is* complicated, but the assembly isn’t as it’s designed to be idiot proof to reduce defects. The lessons are shared which make it look easy. Read The Machine That Changed The World if you want to learn something.
Designing cars is really complicated. A lot of competing requirements to trade off.
Many Chinese (particularly the ones wealthy enough to afford a car) live in vast megacities, where EVs make sense (assuming you can charge them, I’ve no idea what Chinese electricity infrastructure is like). Long distance travel (when permitted) is from one city to another and for that there’s aircraft and high-speed trains.