Welcome to 2013 and "Happy New Year" to those of you to which this applies. At whatever point you have reached in your particular calendar, there is no question that the next 12 months are likely to provide all of us in the oil and associated industries with more challenges and, with luck, some positives to celebrate.
In the very long term, there is certainly good news for oil producers, given ExxonMobil's report that oil will remain the main global energy resource through to 2040 (and possibly beyond while electricity will be the most in-demand energy requirement. That being said, greater fuel efficiency and new engine types mean that conventional petrol and diesel-engined vehicles are likely to account for just 50% of the global fleet by 2040.
In the short-term, vehicle sales - and car sales in particular - are likely to remain the bellweather for lubricants demand and consumer confidence. According to forecasts, US car and SUV sales are expected to top 15m this year, Certainly, the US stats are reflective of a general upturn in confidence and has stimulated OATS to undertake the largest ever revision of its US SUV data with more than 5000 models now added to our database.
As always, China's vehicle sales continue to boom and, depending on which statistics you believe, with around just 85 vehicles for every 1000 people in China, there is still plenty of room for growth. Given that the vehicle parc is relatively young, this is also good news for higher quality lubricant demand.
Unsurprisingly, much of Europe remains in the doldrums: France and Italy in particular are currently experiencing a very poor vehicle market, with French sales dropping 20% in 2012. In turn, European lubricants demand is likely to remain flat for some time and, again, France is particularly badly hit with consumer confidence in this sector running at 86, where anything below 90 is considered seriously pessimistic.
On a macro level, the PMI indices for many of these countries is broadly reflective of the confidence, or otherwise, of consumers in the automotive sector. China (PMI 50.6 Germany (50.3) and the US (50.7) all show signs of positive growth, while France, Italy and Spain languish in the mid-40s.
Ironically, Spain's PMI of just 43.9 is, in fact, at a nine-month high, while Ireland's buoyant 54.2 - gained after tackling its fiscal troubles at an early stage - is at a three-month low. Japan remains in the mid-40s (46.5) as it continues to recover from the tsunami and may also be taking time to adjust to the new Abe government.
Overall, there is no doubt that the global economy is gradually recovering from the shock of 2008 and the US appears to have avoided falling off the fiscal cliff - at least in the very short-term. Providing the US and Chinese governments can look beyond their own, sometimes dysfunctional, internal politics there is a genuine opportunity for the world to move forward. This includes the oil industry and the lubricants sector within it.
The ongoing battle to capture or retain precious national resources will continue but, like the Nexen deal in Canada, Nigeria's new oil regulations, or approval of SAE 16, much of the future will be decided by the legislators. The same can be said for industry safety where, while lessons are learnt and admissions made, accidents continue to happen.
By mid-2013, we should all have a clearer idea of the direction of the world economy. Meanwhile, the internet and its surrounding technologies are likely to continue to drive lubricants marketing as companies seek to reduce their support costs and manage the complexity of a world that is both more joined up and more fragmented than ever. OATS, for one, will continue to support the industry and its clients in making that communication process as seamless as possible.
In the meantime, let's start 2013 with a positive outlook and, as with every month of every year, if you would like to provide comment or content for the OATS Lubes Resource Centre and Bulletin, we would be delighted to hear from you.
Sebastian Crawshaw
Chairman, OATS