So how much impact did the recession make on oil demand? Looking at the figures, the recession that began in late 2008 easily dwarfed the economic slowdown after September 11, 2001. In fact, I had to go back to 1999 to find the last month that saw lower demand numbers than what we saw at the start of the 2008 recession, and demand still has not recovered.
September 2008 is when banks went into crisis, Wall Street panicked, and the recession really began. Oil demand (and thus supply) plummeted in September 2008, dropping to 535.16 million barrels, a number not seen since February 1999. It's important to note that February is routinely a month of poor demand, so if we exclude that month, one must go back to July 1995 to see a comparable month with lower demand.
Even after September 2008, demand remained and continues to remain weak, with the average month seeing just over 573 million barrels of oil supplied. This compares to numbers as high as 651-666 million barrels per month from 2005-2007, yet prices remain higher than a year ago, and even higher than when demand was higher.
I went back to 1981 just to see what kind of numbers I could find, and in January, 1981, producers supplied the market with 571 million barrels. Its important to tell you these numbers all reflect oil product supplied, but supply follows demand lower. If there's lower demand, producers will supply less.
While we won't see 2010 demand rise to impressive numbers, the market and economy apparently believe we will, even betting on it by buying contracts today in hope of selling down the road at a higher price.