We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BP's Review of World Energy Outlines General 2016 Behaviour
Read MoreHide Full Article
BP plc’s (BP - Free Report) 66th annual edition of 2017 BP Statistical Review of World Energy shows that the global energy markets are consistently experiencing long-term changes as they are adapting nearer-term price challenges.
Per the data published in the review, long-term changes are now underway in the markets, with a transition to slower growth in global energy demand. It’s being witnessed that strong demand is coming from the fast-growing and emerging economies of Asia. A distinct shift toward lower carbon fuels as renewable energy continues to grow strongly while coal consumption is undergoing a decline.
Strong oil demand, weak supply growth and surplus inventory continue to create an imbalance in the market and adversely impact oil prices. The pattern of various energy elements during 2016 has been detailed below.
Primary energy
In 2016, global energy demand rose by 1%, which is similar to rises of 1% and 0.9% observed in 2014 and 2015, respectively. The same is considerably lower than the 10-year average growth rate of 1.8%. Majority of this growth came from the booming economies, with China and India together accounting for about 50% of total growth.
Energy demand in India increased 5.4%. However, energy demand in China has been growing at 1.3% compared with 1.2% growth recorded in 2015 and about a quarter of its 10-year average growth.
During 2015 and 2016, average growth was the lowest over a two-year period since 1997-98. Despite this slowing, the incremental rise in demand in China made it the world’s largest energy growth market for the 16th consecutive year. Demand from the developed OECD countries remained flat (rising just 0.2%).
Oil
In 2016, Dated Brent averaged $44 a barrel, down from $52 in 2015 and registered the lowest annual average price since 2004. Global oil consumption grew strongly, increasing by 1.6% or 1.6 million barrels a day (mmb/d), while exceeding the 10-year average rate for a second consecutive year. Strong growth in demand was noticed in India (up 0.3mmb/d) and Europe (up 0.3mmb/d), while demand in China continued to grow (up 0.4mmb/d) despite being lower than in recent years.
Weak prices affected the growth of oil production globally that grew by only 0.5% - the lowest increase since 2009 – or 0.4mmb/d. Production from OPEC grew by 1.2mmb/d, with considerable increases seen from Iran (up 0.7mmb/d), Iraq (up 0.4mmb/d) and Saudi Arabia (up 0.4mmb/d).
On the contrary, non-OPEC oil production decreased by 0.8mmb/d, which is the largest annual decline in about 25 years. The biggest output falls were from the US (down 0.4mmb/d), China and Nigeria (each down 0.3mmbd).
Natural Gas
In 2016, global natural gas consumption increased by 1.5%. This was slower than the 10-year average rate of 2.3%. However, there was strong growth in gas consumption in Europe (up 6%), the Middle East (up 3.5%) and China (up 7.7%).
Global natural gas production rose by only 0.3%. This was the weakest growth in gas output in 34 years, outside the financial crisis. The lower gas prices resulted in decreased gas production that fell for the first time since the shale gas revolution started. Australian gas production, however, grew considerably as new LNG facilities were commissioned.
The new Australian output drove higher global LNG imports/exports by 6.2%. LNG production is anticipated to grow by about 30% in next three years as further new projects are brought online.
The rise of LNG trade reveals not only an ongoing continuing fundamental shift in global gas markets toward greater integration but also toward more competitive and flexible markets – with increasing volumes of LNG under shorter or smaller contracts or uncontracted.
Coal
Global coal consumption declined for the second successive year, by 1.7% or 53 million tonnes of oil equivalent (Mtoe). This fall brought coal’s share of key energy production to 28.1%, which is its lowest share since 2004.
The US (down 8.8%, 33Mtoe), and China (down 1.6%, 26Mtoe) were mainly responsible for the declining consumption. World coal production decreased by 6.2% or 231Mtoe, the largest annual decline on record.
In the UK, coal consumption fell by over 50%. UK coal consumption has now fallen to levels last seen at the beginning of the Industrial Revolution about 200 years ago. The UK power sector recorded its first ‘coal-free’ day in Apr 2017.
Renewables
In 2016, renewables were the fastest growing energy source yet again. Excluding hydroelectric power, renewable energy rose by 12%. While below the 10-year average growth rate for renewables of 15.7%, this still signified the largest annual incremental increase in output on record (an increase of 55Mtoe – exceeding the decline in coal consumption).
Renewables now provide a share of just below 4% of primary energy. Over 50% of growth in renewable power came from wind which rose by 16% in the year. Solar energy increased by 30%. Despite solar energy making up only 18% of the total output, growth of the same represented about a third of the total growth in renewable power.
In 2016, China became the world’s largest single producer of renewable power, overtaking the US, and Asia Pacific overtook Europe & Eurasia to become the largest producing region for renewable power.
Other fuels
In 2016, nuclear power generation rose by 1.3% or 9.3Mtoe. A 24.5% annual increase in Chinese nuclear output accounted for all the net growth in nuclear power. China’s incremental growth of 9.6Mtoe was the largest from any country since 2004. Hydroelectric power generation rose by 2.8% in 2016 – growing by 27.1Mtoe. The largest incremental increase again came from China and then the US.
Conclusion
As China and India are two fastest growing nations with increased energy needs, companies operating out of these nations are likely to benefit the most. Some companies like CNOOC Ltd (CEO - Free Report) , China Petroleum & Chemical Corporation and PetroChina Company Limited are worth mentioning in this respect.
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
Image: Bigstock
BP's Review of World Energy Outlines General 2016 Behaviour
BP plc’s (BP - Free Report) 66th annual edition of 2017 BP Statistical Review of World Energy shows that the global energy markets are consistently experiencing long-term changes as they are adapting nearer-term price challenges.
Per the data published in the review, long-term changes are now underway in the markets, with a transition to slower growth in global energy demand. It’s being witnessed that strong demand is coming from the fast-growing and emerging economies of Asia. A distinct shift toward lower carbon fuels as renewable energy continues to grow strongly while coal consumption is undergoing a decline.
Strong oil demand, weak supply growth and surplus inventory continue to create an imbalance in the market and adversely impact oil prices. The pattern of various energy elements during 2016 has been detailed below.
Primary energy
In 2016, global energy demand rose by 1%, which is similar to rises of 1% and 0.9% observed in 2014 and 2015, respectively. The same is considerably lower than the 10-year average growth rate of 1.8%. Majority of this growth came from the booming economies, with China and India together accounting for about 50% of total growth.
Energy demand in India increased 5.4%. However, energy demand in China has been growing at 1.3% compared with 1.2% growth recorded in 2015 and about a quarter of its 10-year average growth.
During 2015 and 2016, average growth was the lowest over a two-year period since 1997-98. Despite this slowing, the incremental rise in demand in China made it the world’s largest energy growth market for the 16th consecutive year. Demand from the developed OECD countries remained flat (rising just 0.2%).
Oil
In 2016, Dated Brent averaged $44 a barrel, down from $52 in 2015 and registered the lowest annual average price since 2004. Global oil consumption grew strongly, increasing by 1.6% or 1.6 million barrels a day (mmb/d), while exceeding the 10-year average rate for a second consecutive year. Strong growth in demand was noticed in India (up 0.3mmb/d) and Europe (up 0.3mmb/d), while demand in China continued to grow (up 0.4mmb/d) despite being lower than in recent years.
Weak prices affected the growth of oil production globally that grew by only 0.5% - the lowest increase since 2009 – or 0.4mmb/d. Production from OPEC grew by 1.2mmb/d, with considerable increases seen from Iran (up 0.7mmb/d), Iraq (up 0.4mmb/d) and Saudi Arabia (up 0.4mmb/d).
On the contrary, non-OPEC oil production decreased by 0.8mmb/d, which is the largest annual decline in about 25 years. The biggest output falls were from the US (down 0.4mmb/d), China and Nigeria (each down 0.3mmbd).
Natural Gas
In 2016, global natural gas consumption increased by 1.5%. This was slower than the 10-year average rate of 2.3%. However, there was strong growth in gas consumption in Europe (up 6%), the Middle East (up 3.5%) and China (up 7.7%).
Global natural gas production rose by only 0.3%. This was the weakest growth in gas output in 34 years, outside the financial crisis. The lower gas prices resulted in decreased gas production that fell for the first time since the shale gas revolution started. Australian gas production, however, grew considerably as new LNG facilities were commissioned.
The new Australian output drove higher global LNG imports/exports by 6.2%. LNG production is anticipated to grow by about 30% in next three years as further new projects are brought online.
The rise of LNG trade reveals not only an ongoing continuing fundamental shift in global gas markets toward greater integration but also toward more competitive and flexible markets – with increasing volumes of LNG under shorter or smaller contracts or uncontracted.
Coal
Global coal consumption declined for the second successive year, by 1.7% or 53 million tonnes of oil equivalent (Mtoe). This fall brought coal’s share of key energy production to 28.1%, which is its lowest share since 2004.
The US (down 8.8%, 33Mtoe), and China (down 1.6%, 26Mtoe) were mainly responsible for the declining consumption. World coal production decreased by 6.2% or 231Mtoe, the largest annual decline on record.
In the UK, coal consumption fell by over 50%. UK coal consumption has now fallen to levels last seen at the beginning of the Industrial Revolution about 200 years ago. The UK power sector recorded its first ‘coal-free’ day in Apr 2017.
Renewables
In 2016, renewables were the fastest growing energy source yet again. Excluding hydroelectric power, renewable energy rose by 12%. While below the 10-year average growth rate for renewables of 15.7%, this still signified the largest annual incremental increase in output on record (an increase of 55Mtoe – exceeding the decline in coal consumption).
Renewables now provide a share of just below 4% of primary energy. Over 50% of growth in renewable power came from wind which rose by 16% in the year. Solar energy increased by 30%. Despite solar energy making up only 18% of the total output, growth of the same represented about a third of the total growth in renewable power.
In 2016, China became the world’s largest single producer of renewable power, overtaking the US, and Asia Pacific overtook Europe & Eurasia to become the largest producing region for renewable power.
Other fuels
In 2016, nuclear power generation rose by 1.3% or 9.3Mtoe. A 24.5% annual increase in Chinese nuclear output accounted for all the net growth in nuclear power. China’s incremental growth of 9.6Mtoe was the largest from any country since 2004. Hydroelectric power generation rose by 2.8% in 2016 – growing by 27.1Mtoe. The largest incremental increase again came from China and then the US.
Conclusion
As China and India are two fastest growing nations with increased energy needs, companies operating out of these nations are likely to benefit the most. Some companies like CNOOC Ltd (CEO - Free Report) , China Petroleum & Chemical Corporation and PetroChina Company Limited are worth mentioning in this respect.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>