Wondering about the price of gasoline?

Have you been wondering why, in the midst of economic recession, with people having less disposable income, traveling less, and consuming less, the price of gasoline is nevertheless creeping upward?

Wonder no more. It seems that demand from China is behind the increase in demand for oil. Yahoo! News reports:

China is experiencing "astonishing" growth in oil demand this year to match its economic rise while consumption in developed economies is falling, the International Energy Agency said on Friday.

The IEA said demand surged in China in January by 28 percent on a 12-month comparison and raised its forecast for global demand in 2010 to 86.6 million barrels per day (mbd) from its projection last month of 86.5 mbd.

The forecast was 1.8 percent higher than 2009 demand levels.

But the agency said that demand in the area covered by the Organisation for Economic Cooperation and Development (OECD) remained "persistently weak" and would fall by 0.3 percent this year.

The OECD groups 30 developed economies including Britain, France, Germany, Japan and the United States, which account for most of global economic output.

The agency said in its monthly review of energy markets: "This year's global oil demand growth will be driven entirely by non-OECD countries, with non-OECD Asia alone representing over half of total growth."

Demand in developing nations will rise by 4.3 percent in 2010, offsetting the 0.3-percent contraction in the OECD, the group's fifth year of decline in a row, the IEA said.

"The OECD has not only borne the brunt of the demand slump, but will also see no net recovery at all," it said.

"China is currently expected to account for almost a third of global oil demand growth in 2010," it said.

. . .

The recovery in global oil demand comes after the worldwide economic crisis caused demand to fall by 1.4 percent in 2009.

The IEA said the latest data confirms that demand returned to growth on a yearly basis in the last three months of 2009 after five consecutive quarters of decline.

There's more at the link.

The interesting question is this: when the US economy finally recovers, and our motorists want to buy more fuel, will it be available to them - or will it be locked into contracts with China? The answer(s) to that question might make interesting reading . . . and directly affect all of us.

Peter