Oil Market Report

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Demand Adjustments to MOS and Non-OECD Data	Member governments submit annual oil demand data about six months after the end of the year. Following the receipt of this information, the differences between these annual data and the aggregate of the twelve corresponding MOS data are used to adjust the monthly data used in the report for the relevant year and the same adjustments are used to correct MOS data relating to the next year. Annual non-OECD data are obtained from a wide range of sources including governments, industry and international organisations such as the United Nations, ASEAN, OLADE, the OPEC Secretariat and APEC. Monthly and quarterly non-OECD data are adjusted using the same procedure as for the OECD once the annual data become available. However, final annual data are generally only available for the year (12-18 months before the current year) and, therefore, adjustments have to be made to historical data and forecasts. The adjustments also tend to be larger in percentage terms and, in some cases, need to include estimates of bunker fuel demand or refinery fuel use which were missing from the original data.
Demand Preliminary OECD Data	Preliminary demand data for the month after the latest MOS submission (i.e. two months before release of the report) are collected for the nine largest oil-consuming countries. Preliminary data typically are limited to inland deliveries and exclude refinery fuel and bunkers. Canadian LPG delivery data also exclude petrochemicals feedstock use. These unadjusted data are shown in the preliminary inland delivery table in the Demand section of the report. The rate of growth in inland deliveries provides guidance for the rate of growth in total deliveries (including bunkers and refinery fuel). The preliminary data are often subject to significant revision and so are not always used. The data sources include: US: Energy Information Administration (Weekly Petroleum Status Report); Japan: METI; France: Comité Professionnel du Pétrole (Bulletin Mensuel); Germany: Mineralölwirtschaftsverband e.V. (MWV); UK: Petroleum Industry Association (UKPIA); Italy: Ministry of Industry (Staffetta Quotidiana); Canada: Statistics Canada; Korea: KNOC; Mexico: Petroleos Mexicanos (PEMEX).
Demand Procedures for Projecting Demand	The key parameters affecting annual oil demand growth in are economic activity, the share of oil in the energy mix, the efficiency of oil use, oil prices (both in absolute terms and relative to competing fuels) and the weather. These factors are taken into account in the IEA’s short-/medium-term oil demand model. The sources of real GDP growth projections include the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), the World Bank (WB), the Asian Development Bank (ADB), Consensus Forecasts and government projections, among others. These assumptions are adjusted as often as necessary in periods of economic turbulence; otherwise, there are generally revised twice a year. Forecasts are generally based on the assumption of normal weather, and thus take into account deviations from normal conditions (defined as the previous 10-year average). The use of oil products for heating or cooling and power generation is indeed affected by temperature variations. However, oil use is also affected by variations in other climatic conditions. Snow storms tend to reduce road traffic. Low rainfall (and hence low reservoir levels) can reduce hydro power output and low river levels can affect nuclear power output, both of which can lead to increased oil use for power generation. Conversely, high rainfall and high reservoir levels can curb oil use for power generation. Changes in the price differential between oil and competing fuels can lead to interfuel substitution in both the power generation and industrial sectors, with oil being displaced when competing fuels such as coal and natural gas become much cheaper. Similarly, increases in end-user prices can dampen demand growth and, more significantly, can affect the timing of purchases. For example, if a tax is announced in advance, end-consumers or wholesalers will tend to increase purchases ahead, leading to a corresponding decrease in the next month. Consumers may also occasionally anticipate the timing and size of an unannounced tax increase. Thus, to assess the potential effect on demand growth of a tax change, it is desirable to know at what time of the month it occurred, whether it was announced in advance and, for annual increases, its size in relation to that of the previous year. Another factor which can affect the timing of the purchases and hence the month-by-month change in demand is the perception of future oil prices. Since oil is bought in local currency but traded internationally in US dollars, changes in exchange rates as well as in cargo market prices can affect demand. If the market is in backwardation there will be a tendency to defer purchases and draw stocks and the opposite will occur if the market is in contango. For example, the timing of purchases by major electricity-generating companies can significantly affect the pattern of short-term sales, while the timing of consumer seasonal stock build of heating oil can also have a substantial influence on the summer pattern of deliveries. Finally, two other factors can affect the monthly pattern of sales. These are the number of working days in the month and strikes by oil delivery workers. Some holidays, such as Easter, may occur in different months and thus distort seasonal patterns. Strikes can clearly lead to a permanent or temporary reduction in deliveries.
Demand Apparent Demand	An estimate of domestic demand (as opposed to counting barrels whose actual delivery has been reported and documented). Calculation varies by country. For example, in China, apparent demand is defined as refinery output plus net product imports (adjusted for fuel oil and direct crude burning, smuggling and stock changes).
Demand Consumption	Consumption is the use of oil.
Demand Cooling Degree-Days	Cooling Degree-Days are the number of degrees per day that the daily average temperature is above a given temperature (18°C or 65°F). This temperature is the point above which the consumer is assumed to use energy for space cooling. During the cooling season, warmer-than-normal temperatures tend to lead to increased electricity use, with increased demand for electricity often met by incremental use of oil products and natural gas.
Demand Deliveries	Deliveries refer to the supply of oil products from primary stocks to wholesalers and retailers or direct to end-users.
Demand Demand	Demand is total inland deliveries plus refinery fuels and bunkers minus backflows from the petro-chemicals sector. It is thus equivalent to oil consumption plus any secondary and tertiary stock increases.
Demand Dieselisation	Dieselisation is the increase in the proportion of diesel-fuelled cars to gasoline-fuelled cars. As diesel fuelled cars are generally more energy efficient than those fuelled by gasoline, this change in the car population contributes to lower transport fuel demand (in volume terms) than would otherwise occur.
Demand Economic Growth	Economic Growth in this report generally refers to a given country's increase in its real, seasonally adjusted Gross Domestic Product (GDP).
Demand Heating Degree-Days	Heating Degree-Days are the number of degrees per day that the daily average temperature is below a given temperature (18°C or 65°F). The given temperature is the point below which the consumer is assumed to use fuels for space heating and varies from country to country.
Demand MOS	IEA Monthly Oil Statistics including crude and products trade by source and destination for OECD Member countries, submitted in tonnes. These figures, converted into barrels, are used in the OMR and the Annual Statistical Supplement.
Demand Working Days	The number of working days in a month is the total number of days less the number of weekend days and national holidays. The change in total working days can explain part of the year-on-year change in deliveries, particularly for transport fuels. In some countries, such as France, national holidays are fixed on a particular date rather than a day of the week and the holiday is lost if it occurs at the weekend (or on Sundays in Japan). In other countries such as the US or UK, national holidays are fixed to a particular day in the month. National holidays at Easter can occur in March or April, significantly affecting the annual change in total working days in these months.