Higher oil and fuel prices, increased volatility on tap for rest of 2018

This is an excerpt of the original article. It was written for the May-June 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2018

Last month, I was in Atlanta at the Modex trade show. In one sense, it is a tribute to the automation technologies managing today’s distribution networks. And, I’m not only talking about automated materials handling systems, but also the software and NextGen technologies such as robotics, wearable technologies, including smart glasses and augmented reality solutions and sensors enabling the Internet of Things. In another sense, all of these solutions are coming together to drive fulfillment. With the increase in e-commerce, getting the right product to the right customer at the right time has never been more important.

Browse this issue archive.

Already a subscriber? Access full edition now.

Need Help?

Contact customer service

847-559-7581   More options

Not a subscriber? Start your magazine subscription.

As expected, oil markets continued to tighten over the course of the first quarter, and there is every reason to expect that markets will remain tight through the rest of the year. Consequently, oil prices will continue to face upward pressure, and—perhaps even more importantly—oil prices will become even more sensitive to geopolitical disruptions.

Strong global demand

Strong global demand has underpinned the nearly 60% oil price increase that has occurred since last summer. Over the course of last year, global oil consumption grew by 1.8%, and demand was 2.1% higher in the first quarter of 2018 than it was in the first quarter of 2017.

A continued strengthening of the global economy should correlate to a slight acceleration in global oil consumption through the end of the year. While world GDP grew by a healthy rate of 3.7% in 2017, the consensus outlook among 10a investment banks is for the world economy to grow by 4.0% this year.

SC
MR