Global trade flows are decreasing in all key regions as the world economy is close to recession for the first time since 2008/09. If this happens, it could limit growth in oil consumption, specifically for mid-distillates such as diesel.
As Reuters reports, freight volumes handled through major ports such as Long Beach and Singapore have either remained flat or have reduced in comparison to 2018.
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What is more, seaborne container volumes via California’s Long Beach, were less by 10% in March-May compared to the previous year.
In addition, container volumes through Singapore increased 1% between March and May compared with a year earlier, however growth has limited from 16% in the first quarter of 2018.
What is more, there are indicators that the slowdown will continue for all of 2019, leading to recession.
In fact, global manufacturers report that new export orders have been reducing for nine months and are now declining at the fastest rate since 2015/16, JPMorgan global purchasing managers’ index, notes.
Furthermore, the World Trade Organization’s trade outlook indicator is now to its lowest since 2010, indicating a deceleration in trade volume growth.
In March, the OECD’s composite leading indicator of economic activity in the advanced economies and major emerging markets fell to its lowest level since the recession of 2008/09.
Nevertheless, the global economy might still avoid a recession, but at the moment this does not seem as likely.
