Latin America Oil Demand in December 2014

In Brazil, oil demand grew strongly in October 2014 y-o-y, rising by almost 0.17 mb/d or just below 7%. This growth was achieved despite the overall unstable economic sentiment. All product requirements rose, with the exception of LPG. Similar to last month, growth was mainly weather-related as a drought affected oil consumption positively. Fuel oil rose the most in percentage terms, rising by more than 35%, while gasoline grew the most in absolute terms, growing by more than 70 tb/d. Brazil’s dependence on hydroelectricity for power generation resulted in a shortage of power supply due to a lack of rainfall, boosting fuel oil and diesel demand. Diesel oil was on the rise, growing by around 5% y-o-y. October gasoline demand also picked up as a result, growing by almost 10% y-o-y, due to a shortage of ethanol.

In Ecuador, despite negative oil demand growth during October by around 12 tb/d y-o-y, demand was on the rise on a cumulative basis from January to October of 2014 by as much as 4% y-o-y. Gasoline, gasoil and fuel oil demand rose in line with all related indicators, car sales and industrial activity.

In Argentina, year-to-date (January-September 2014) oil demand growth levels were almost flat, falling marginally by a mere 2 tb/d or 0.3% y-o-y. All product categories were more or less neutral, to some extent increasing, or slightly decreasing. While LPG, jet/kerosene and fuel oil were positive, gasoline was flat, and diesel oil and other products were rather negative, inferring no significant developments in the country as compared to 2013.

Oil usage in the transportation and industrial sectors is projected to constitute the bulk of 2015 oil demand growth. Some downside risks are eminent, however, in the economic developments of the main oil consuming countries such as Brazil, Argentina and Venezuela.

Total oil demand in the region is estimated to reach 6.72 mb/d during 2014 with yearly growth of 0.22 mb/d. The current outlook foresees oil demand growing by 0.21 mb/d in 2015.