BP: World 2009 oil use drop biggest since 1982

LONDON (Reuters) - World oil consumption fell by 1.2 million barrels per day in 2009, the largest volume drop since 1982, but is likely to rise this year due to robust demand from emerging markets, British oil major BP said on Wednesday.

Economic recession cut global oil consumption for the second consecutive year and the world's fossil fuel energy use for the first time since 1982, BP said in its annual Statistical Review of World Energy.

"The strong link between energy and the global economy asserted itself," Christof Ruehl, BP's chief economist, told a conference at the release of the review.

"Global oil demand is no longer declining ... (and) appears to be on the rising path in 2010," he added.

Ruehl said the growth in demand would continue to come from Asia, while demand from developed countries has already peaked.

"All the demand growth came from China, Saudi Arabia and India," he said, while demand fell in OECD countries to the lowest level since 1995.

Ruehl attributed the fall in OECD demand to high prices, changes in technology and increased energy efficiency.

"OECD demand has peaked and is unlikely to recover to the peak in 2005," he said.

OUTPUT

International benchmark U.S. crude was trading around $74 a barrel on Wednesday, up from about $32 in late December 2008.

Crude oil prices rose more quickly than other fuels due mainly to a 4.2 million bpd output cut implemented by the Organization of the Petroleum Exporting Counties (OPEC) in late 2008, Ruehl said.

On the other hand, output from outside OPEC increased, with the biggest growth contribution coming from the U.S. Gulf of Mexico.

Overall, the world's oil production dropped last year more sharply than consumption by 2 million bpd, or 2.6 percent, which was also the largest decline since 1982, BP said.

The current prices, however, may be a sweet spot to maintain investment, said Iain Conn, BP's managing director.

"Our price assumption at $60-$90 a barrel is an appropriate range for planning," Conn said at the conference.

The world's proven oil reserves stood at 1.33 trillion barrels last year, an increase of 700 million barrels from 2008.

Gas reserves grew by 2.21 trillion cubic meters last year, while production fell by 2.1 percent, marking the first decline on record, BP said.

Natural gas production fell by over 74 billion cubic meters in Russia and by 29.9 bcm in Turkmenistan, the largest declines on record, while gas output in the United States rose strongly for the third consecutive year.

Russia also saw the biggest decline in gas consumption, down 26.3 bcm year-on-year. Gas consumption overall fell by about 2.1 percent, the most rapid decline on record and the sharpest decline among major fuels, BP said.

REFINING

Refining margins were pressured, with BP's global indicator averaging around $4 a barrel, the lowest level in seven years.

Capacity additions totaled 2 million bpd last year, with the Asia-Pacific region accounting for 80 percent of the increase, BP said.

Global refining utilization rates fell to a 15-year low of 81 percent, and unused capacity currently exceeds 17 million bpd due to run cuts.

"Run cuts so far have disproportionately concentrated in OECD countries," Ruehl said. "Further consolidation is inevitable."

(Additional reporting by Daniel Fineren, editing by Jane Baird)