According to the estimates of economic planners in the government of the Netherlands, the volume of world trade has risen by nearly 5% from May to June and the growth rate has quadrupled over the same period in 2016.
The boom in commodity markets from 2010 to 2014 led to a substantial increase in the demand for intermodal cargoes. According to the analysis by the Bureau of Economic Policy Analysis, between 2010 and 2014, the average volume of global trade increased 3.7% per annum. Global fuel oil consumption increased nearly 3 million barrels over the same period, while gasoline consumption increased 1.7 million barrels.
But when the commodity markets entered the wake in 2015 and 2016, the volume of trade and freight-related fuel demand was particularly hit hard. Between January 2015 and October 2016, global trade remained flat which is mainly due to the decline of global trade.
However, since the end of 2016, commodity markets and trade flows have shown signs of recovery, reflecting a significant increase in demand for freight fuel. Consumption of fuel oil for the U.S. low-sulfur fraction has been growing at the fastest rate in two years, while recording exports have shown strong demand in Latin America and other markets.
In turn, the demand for freight fuels will encourage oil refineries to deal with recording amounts of crude oil and reduce the stock of crude oil.
The growing demand for freight helps rebalance the oil market and boost prices, which in turn will boost incomes in many commodity-exporting countries and stimulate further freight growth and fuel demand by 2018.
Two years later, gasoline is the main driver of global oil demand in 2015/16 . Demand growth is shifting to distillate fuel oil and will continue until 2018/19.
The cyclical recovery of the oil industry is at an early stage. Now it is out of sync with the US business cycle. The deviation between the US business cycle and the oil industry cycle will become a growing source of risk before 2019/2020.