According to Josef Schachter, author of the Schachter Energy Report, Energy Bull Markets start from a period of lackluster action in the sector and then some key metric changes. “In the 1970s it was the launch of Japan as a juggernaut export economy,” he says. “In the 2000-2008 period it was China, industrializing and lifting demand for crude, and exporting some, from 4.2Mb/d to over 11Mb/d.” Currently China’s demand is 12Mb/d and they are importing 8Mb/d of that. In the upcoming cycle Schachter sees India at the margin being the driver of strong incremental demand as its economy evolves from a backwater state to a rapidly industrializing one.
India, with a population of 1.35B people, now consumes between 4.5-4.8Mb/d. As they put more cars and trucks on the road this could grow by the end of the next decade to even more energy usage than China, according to the BP Energy Outlook. “With nearly similar populations this is not out of the realm of possibility,” he says.