In the nine months ending in September 2019, the use by industrial customers of power, natural gas and diesel have all recorded substantial declines or, at least, rapid slowdowns. According to US statistics, the total energy consumption of industrial users fell 1 percent in July-September, compared with the same period the previous year. Administration of Energy Information.
This was the largest fall since the 2015/16 slower production cycle and the 2008/09 recession (Monthly Energy Review, EIA, 23 Dec.). In the third quarter, the use of electricity by industrial customers declined by almost 5 percent from the previous year, the largest fall since the recession.
Power consumption shows a large number of short-term weather fluctuations (which affect the demand for heating and cooling) as well as the state of the economy, so it is important to interpret the data carefully. Nevertheless, the usage of industrial users has shown a slightly more noticeable third quarter slowing down than that of residential users.
The consumption of industrial gas continued to increase, mainly due to the rapid increase in demand from the petrochemical producers as opposed to electricity (TMSnrt.rs/39H29K0). Nevertheless, the gas usage rose by only 0.75% in July-September, up from 7% year-on-year at the beginning of 2018.
The demand for oil, in particular for medium distillate fuel oil, such as diesel used by manufacturers, tramways and trucking companies, was affected by the manufactured products and freight slowdown. In August-October, the use of distillates in the worldwide economy dropped almost 3.4 percent compared to a year ago (“Monthly Oil Supply,” EIA, Dec. 31).
Like the use of energy, the use of distillate closely tracks industrial output and development inquiries, so that the fuel use slump is confirming the serious impact on demand in the mid-2009 period. A decline in refining activity and lower profitability of many refining companies, including some oil Majeure, has reflected slackening distillate demand.
The slowdown in Europe and Asia in terms of manufacturing and freight were even worse, as rising tariffs and growing market uncertainty influenced investment and activities. As a result, the distillate demand in North America, Europe, and Asia has dropped globally, impacting refining production, margins, and income for refiners.