BP 2011 Annual Report Download - page 20

18 BP Annual Report and Form 20-F 2011
Our market
In 2011, energy markets proved resilient, with
continued growth despite volatile conditions in the
global economy.
The growth in world oil consumption slowed in 2011, albeit with continued robust
growth in China and certain other non-OECD countries partially offsetting an
overall decline in OECD countries. However, despite the slowdown in demand,
average crude oil prices in 2011 were significantly higher than in the previous year,
exceeding $100 per barrel for the first time (in nominal terms). Natural gas prices
diverged globally in 2011. Globally, refining margins improved on average as oil
product demand continued to grow.
Economic context
After a very strong 2010, world economic growth slowed in 2011 and we expect
subdued global growth to continue in 2012. Emerging economies with stronger
productivity and rising populations led by China and India are set to drive growth,
while developed countries may lag behind as they seek to address their internal
fiscal imbalances.
Energy demand, and in particular oil demand, has followed overall economic
trends in recent years, recovering strongly in 2010 but facing more challenging
conditions in 2011, especially in OECD markets.
Concerns about the volatility of commodity and financial markets, energy
security and climate change have led to continued debate over the appropriate
role of markets, government regulation and other policy measures that affect the
supply and consumption of energy. Given the pressures in the sector, we expect
regulation and taxation of the energy industry and energy users to increase in
many areas in the future.
Left Modernization
work at BP’s Whiting
refinery, Indiana, made
significant progress
in 2011, with the
completion of a new
pipeline to Canada.
Right Operations
at our East Azeri
platform. BP
production in
Azerbaijan is an
important source of
natural gas for markets
in Western Europe.