Oil demand may be one of the trickier things to measure. While today's reports may indicate that there is not enough oil to meet future needs, tomorrow's may say that there is an overabundance of oil and that demand is not high enough. These changes are due to a number of factors.
For one, the direction of the oil market depends on the slant of the individual reporting on it. Demand reports will usually comply with the reporter's best interests. However, the primary reason behind the constant fluctuation of demand may simply be the uncertainty of today's economy.
The current economic landscape has very little margin for error. Any event can have a drastic effect on future outlooks. Forecast accuracy has a shelf-life of roughly 24 hours, so it's important for those affected by the economical winds of change to always be up to date on any adjustments.
As this blog reported yesterday, the IEA is forecasting a global oil shortage within the next five years. However, as the markets closed it appeared that oil prices were going down, a move that many analysts suggested was led by China's economic struggles.
"Oil markets are keenly attuned to China's growth," wrote Laurent Belsie, a contributor at the Energy Voices blog for the online publication Christian Science Monitor. "Over the weekend, Beijing released trade data that suggested that the world's second-largest economy may be stabilizing but is not yet growing, which caused oil prices to fall Monday."
China's slowing economy will hamper oil demand, but if efforts to spur growth are successful, demand will quickly regain steam. Regardless, it is crucial for oil companies to equip themselves with oilfield equipment designed to build efficiency into the extraction process.
Because there's no telling what demand will be like tomorrow, producers should always be prepared for any occasion. Working with an oilfield technologies provider and gaining the right tools to enhance efficiency and organization within all operations will allow companies to stay ahead of constantly changing trends.