WSJ: IEA: Europe Drains the Oil

The U.S. shale boom is a big reason why oil markets have shrugged off the world’s geopolitical turmoil. But Europe has also helped out in its own peculiar way. In the International Energy Agency’s latest monthly oil report, released Tuesday, U.S. oil supply is forecast to rise by 1.2 million barrels a day this year—more than enough to meet the agency’s revised one million barrel a day estimate of global demand growth.

Also helping to keep things loose, though, is Europe—on the demand side. The IEA’s “Europe 5” (France, Germany, Italy, Spain and the U.K.) are set to burn 110,000 barrels a day less this year. That almost offsets the forecast increase in demand from Africa.

Europe’s ongoing efforts at fuel efficiency explain part of the decline, but economic malaise is a more potent factor. That can be seen in the IEA’s “Annual Statistical Supplement,” also out Thursday. OECD Europe burned 1.8 million barrels a day fewer in 2013 than in 1999, with all of that happening after 2008. Coincidentally, that almost completely offset the increase in demand from South America since 1999–the old world making way for the new.
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