Saturday, July 2, 2016

India's oil demand is exploding higher

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India’s fuel demand grew 11 percent in the year ended March, the quickest pace in records going back to 2001. The country is expected to surpass Japan as the world’s third-largest oil user this year and will be the fastest-growing consumer through 2040, the International Energy Agency estimates. India is forecast to use 4.34 million barrels a day of oil this year, compared with 19.6 million in the U.S. and 11.7 million in China, the IEA said in its latest monthly market report.

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Before factoring in the impact from pay increases, total oil product demand was already seen growing as much as 8 percent this fiscal year, according to BPCL’s Varadarajan. Gasoline demand was expected to expand as much as 12 percent and diesel as much as 6 percent this fiscal year, he said.

This is a perfect example of why you have to look at things rationally and unemotionally. Indians are buying more scooters and cars regardless of Brexit or whatever other media manufactured crisis of the day.

This is my whole investment thesis. As people get wealthier they want the conveniences that we enjoy in the west. The investment implications are that there are billions of these people. 

Once somebody buys a car or scooter they become a permanent user of oil that someone has to supply. people do not buy cars to park them. They drive and that creates more demand. If you buy when prices are at the low of the cycle you can take advantage of these economic certainties. 


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