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After spending some more time looking at the data, i can see that the most developed economies are far more "price sensitive" to petro than the developing world.
Case in point: In 2000, daily oil consumption averaged 4,795.715 barrels per day. In 2010, daily oil consumption averaged 8,371 barrels per day, an increase of 74.58%! If we are to assume that by 2020 they will consume 50% more than today (a conservative assumption given the undervalued yuan), they will take an additional 4185.5 barrels per day from global supply.
What does this mean? Close to half of all growth in global demand for petro will come from China. Our current consumption is not sustainable without serious price increases as global supply will be incapable of keeping up with emerging market demand. Therefore, convergence is almost a guarantee!
Case in point: In 2000, daily oil consumption averaged 4,795.715 barrels per day. In 2010, daily oil consumption averaged 8,371 barrels per day, an increase of 74.58%! If we are to assume that by 2020 they will consume 50% more than today (a conservative assumption given the undervalued yuan), they will take an additional 4185.5 barrels per day from global supply.
What does this mean? Close to half of all growth in global demand for petro will come from China. Our current consumption is not sustainable without serious price increases as global supply will be incapable of keeping up with emerging market demand. Therefore, convergence is almost a guarantee!