Global Oil Demand Growth Is Slowing Going Into 2016 -- Reason #3 Why I Love To Blog -- February 4, 2016

Over at Rigzone, this article by John Kemp: Global oil demand growth is slowing, going into 2016. A close reading of this article will dovetail nicely with three observations noted on the blog starting last summer, 2015, and maybe even earlier:

• price of diesel compared to gasoline
• gasoline demand in US
• sudden drop in gasoline demand in autumn of 2015

Regular readers who have been following the blog closely will connect the dots. I would love to write more but I can't. The above linked Rigzone article is archived.

Also this article: freight truck orders plummet 48% in January. Orders reach second-lowest level since 2012 as truck companies wary of weak industrial shipping demand.

Orders for new big rigs plunged in January, as trucking companies eyeing weak shipping demand held back from investing in fleets.

Just 18,200 new trucks were ordered last month, down 48% from a year earlier and marking the second-lowest monthly total since 2012. The data dashed equipment makers’ hopes that relatively strong December orders would carry over into the new year.

Instead, trucking companies are canceling expansion plans and postponing trade-ins for their older vehicles. They fear that new trucks will sit idle if lower-than-expected retail sales over the holidays and signs of contraction in the manufacturing sector translate into a sluggish freight market this year.

See also this article on Daimler-Benz, a huge truck manufacturer.

Shares in Daimler AG fell 5% in early trade after the German auto maker that owns the Mercedes-Benz luxury car brand said Thursday growth in earnings and sales this year is likely to be slower than in 2015.

The share fall came despite Daimler posting record sales and strong earnings last year.

The Stuttgart-based automotive company said Mercedes-Benz sold more than two million cars for the first time last year, driven by strong sales of its new C-Class models, luxury compact cars and sport-utility vehicles.

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Cheap Gas Not Turning Into More Discretionary Cash For Americans 

Barron's. 

This has to be particularly disheartening to economists who believed that cheap gasoline was going to spur consumers to consume more. After all, money saved on gasoline is money that can be spent elsewhere. One look at the stock market and we have to conclude that did not happen as consumer stocks fell.

Blindspot: healthcare, ObamaCare not mentioned in the article. 

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Texas, Mexico, And Eagle Ford Shale

An excerpt from a Rigzone article (archived):

Mexico energy agencies currently are defining contractual terms for an upcoming auction of contracts related to shale resources to the private sector, the Texas Railroad Commission said in the press statement.

The sale is expected to include Mexico’s unconventional assets, just south of the Texas-Mexico border. The portion of the Eagle Ford shale that extends into Mexico is part of the Burgos Basin, where technically recoverable shale gas is projected at 343 trillion cubic feet (Tcf), or two-thirds of Mexico’s technically recoverable shale gas resources.

SENER is reviewing key factors that have contributed to the regulatory success of the Texas shale industry. Mexico is estimated to have 545 Tcf of shale natural gas reserves, and unconventional oil reserves of 13 billion barrels, according to a 2015 report by the University of Texas at San Antonio, Universidad Autonoma de Nuevo Leon, Asociacion de Empresarios Mexicanos, and the Mexico Institute of the Woodrow Wilson International Center for Scholars.

While the initial focus on exploration will likely be on conventional onshore, offshore and deepwater, he three centers of learning conclude that Mexico’s shale resources will play an integral role in the success of Mexico’s energy reform. vHowever, significant challenges such as oil prices, contract terms offered by Mexico’s government, social license issues and infrastructure must be addressed before shale development can move forward.

The unprecedented expansion of the Eagle Ford not only helped boost U.S. oil production, but transformed South Texas, creating jobs and economic activity in the region. In November 2014, Eagle Ford production crossed the one billion barrel mark for crude and condensate production.

The current low oil price environment has prompted cutbacks in activity in the Eagle Ford and other shale plays. Reuters reported last month that February production from the Eagle Ford shale was expected to fall 72,000 barrels of oil per day.