Global economic growth is the major force behind the demand for energy. The globalization trends are strongly in place. The global economy will likely grow 4% in 1997 versus 2.6% in 1996. In the U.S., recent unemployment numbers have pointed to above-average growth. Japan’s GDP rose at a 12.7% annualized rate in the first quarter, and loose credit conditions and weaker currencies should lead to a recovery in Europe. Investment spending and exports have accelerated in Germany and France, which represents about 40% of the European Union’s total output. Developing countries that now represent 45% of the global economic picture are growing at twice the rate of the richer nations; thus they are garnering an increasing share of the global economy. By the year 2002, emerging nations will overtake the developed economies as a percentage of global economic output. Asia remains on a strong growth course and Central and South America, as well as Central Europe, are poised to rebound soon. All this growth and economic activity will require energy. The relatively low price of oil is itself a worldwide stimulus to demand.
Oil consumption is increasing more than twice as fast in the Pacific Rim as in the world as a whole. Demand for oil is growing at a 4% rate in the Pacific Rim, compared with a 1.5% to 2% rate worldwide. Much of this strength in the Far East is the direct result of urbanification, an increase in automotive transport, and a growth in aviation volume. Asia’s urban population is projected to rise by more than 200 million people between 1995 and 2000, and to grow by more than one billion people over the next 20 years