LONDON (Reuters) - Oil demand may never return to growth in the United States, Europe and parts of Asia, easing the strain on long-term supplies and prices as emerging countries burn ever more fuel.
The surge in oil to a record near $150 a barrel last year heightened concern the world will run out of crude and supply will start to dwindle -- a theory known as “peak oil.”
Now a deepening recession and oil price collapse have raised the issue of whether demand, not supply, is nearing its peak.
Oil use in the industrialized countries that are members of the Organization for Economic Co-operation and Development (OECD), such as the United States, Japan and western Europe may have peaked already, according to some analysts.
“There is a reasonable likelihood that OECD oil demand has peaked,” said Peter Davies, former chief economist at BP Plc who was in charge of preparing BP’s annual Statistical Review of World Energy, a standard reference work.
Among OECD economies, the United States had sustained robust oil demand growth due to an expanding economy and less focus on conservation, while western Europe and Japan were posting declines.
U.S. patterns could be about to change as the recession erodes consumption. By the time rich countries return to economic growth, their efforts to use less oil and slow the impact of global warming could be taking hold.
Barack Obama, taking office as the 44th U.S. president, aims to greatly increase alternative energy production in the world’s top energy consumer.
“More and more analysts are sold on the idea that U.S. oil demand peaked in 2007,” Antoine Halff and Veronique Lashinski, energy analysts at Newedge brokerage, said in a report.
“The market meltdown is likely to entrench current demand losses not only in the U.S. itself but in the world at large.”
The peaking of OECD demand will not choke off growth in oil consumption worldwide for the foreseeable future as emerging economies expand and billions of people seek to improve their living standards.
“The West no longer rules the world,” said a senior oil executive who requested anonymity. “Whatever the OECD is doing, it will not prevent worldwide energy consumption from growing, due to emerging country growth.”
Oil’s jump to more than $100 a barrel a year ago increased interest in peak oil supply, a theory that had long been consigned to the fringes of informed opinion.
This issue has faded as economic slowdown eroded demand, meaning supply is abundant for now and consumption is key to shaping oil market sentiment.
“The term (peak demand) has become fashionable over the last year, but applied to OECD, not global demand,” said Newedge’s Halff.
“Even the idea of a slowdown in non-OECD demand that would keep it from offsetting contraction elsewhere stretches the imagination at this stage.”
Some believe global consumption of oil could reach a high point in the next decades, as policies to tackle climate change are put in place.
“Peak demand is only likely to be generated by effective implementation of climate change policies across a large part of the world,” said Davies, who is now a consultant after retiring from BP last year.
“I would not expect this to occur within the next decade, although the policies could be in place by then that will eventually lead to peak demand.”
Editing by Anthony Barker