363. PEAK DEMAND
Lots of recent signs that we are hitting peak demand (with a salute to our wise and prescient friend, Benny "peak demand" Cole ;-)...
The US Department of Transportation reports that vehicle miles traveled (VMT) has begun its terminal decline:
The FHWA's “Traffic Volume Trends” report, produced monthly since 1942, shows that estimated vehicle miles traveled (VMT) on all U.S. public roads for March 2008 fell 4.3 percent as compared with March 2007 travel. This is the first time estimated March travel on public roads fell since 1979. At 11 billion miles less in March 2008 than in the previous March, this is the sharpest yearly drop for any month in FHWA history.SourceHere's the graph:
As you can see we're having a "Hubbert Peak" in demand.
Meanwhile CERA is reporting peak demand for gasoline:
Gasoline demand in the United States may have reached its peak, as rising prices lead consumers to make long-term decisions that will weaken demand in the years to come, according to a new analysis by Cambridge Energy Research Associates (CERA), an IHS Inc. (NYSE: IHS) company.MasterCard reports a big drop in U.S. gas sales:
The report, Drivers Turn the Corner in the United States, conducted by CERA’s global oil service predicts that U.S. gasoline demand will likely decline in 2008 for the first time in 17 years. If petroleum prices stay at or near their current levels, 2007 could prove to have been the peak year for U.S. gasoline demand.
"Americans are now driving less and demanding greater fuel efficiency from their vehicles when they do drive," said Aaron Brady, CERA director, global oil. "Automakers are responding by accelerating the shift in their model mix. Both short- and long-term signals are all pointing toward decreasing future demand."Source
During the week leading up to the Memorial Day holiday, the traditional start of vacation season, Americans pumped 5.5 percent less gasoline than a year ago as average prices hit a peak $3.84 a gallon, MasterCard Advisors said in a report.SourceDemand in the UK is sagging:
Gasoline demand in Britain dropped 7 percent below year-ago levels in April, with diesel use down almost 2 percent, according to government figures released on Wednesday.SourceGasoline demand in Japan has declined for the last two years:
Japan's Ministry of Economy, Trade and Industry reported on Thursday that gasoline demand declined for a second year in 2007 on rising oil prices, urging refiners to export record amounts of fuel.And the trend is continuing. The most recent May 13 Oil Market Report from the IEA reports (P. 6) gasoline demand for March 2008 down (year-on-year) by -8% in Germany, -4% in the UK, -14% in France, -10% in Italy, -9% in Spain and -14% in Japan. Similarly, diesel was down -4% in Germany, -6% in France, -4% in Italy, -10% in Spain and -10% in Japan. And those are the figures for March, before oil prices really went vertical.
Sales of gasoline slipped 1.7% to 59.8 million kiloliters in 2007, while exports of all refined oil-products climbed 27% to 28 million kiloliters, exceeding the prior record of 22.3 million kiloliters posted in 1975.Source
Anyway, lots of good news. The fear factor of peak oil drops considerably if demand peaks before oil does.
-- by JD