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Improvements in vehicle fuel efficiency are a key driver of oil demand destruction to 2030. Standards for light vehicles span multiple countries and regions, which together account for almost 75% of global gasoline sales. Light vehicle fuel efficiency improvements in Europe, the US, China, and India alone account for 2.4 million b/d of demand lost by 2030. However, our estimate of the impact of fuel efficiency improvements through time are risked since government policies and their enforcement are subject to change. In this report, we assess the impact from fuel efficiency on oil demand, including: • CAFE standards in the US – what is under review? • EU standards – how will the new targets impact demand? • China's CAFC standards – how does the new dual credit scheme affect implementation?

The global economy entered 2018 on a high, but momentum has since waned. We expect the wobbles in early 2018 to be short lived. A full-blown trade conflict between China and the US is a risk but still an outside one; both sides have too much to lose and relatively little to gain. The US economy is growing at a healthy pace, and we don't expect inflation to rise much above the Fed's 2% target. Interest rates will rise, but at a pace the markets should be able to handle. And as the US dollar resumes its slide, emerging markets will breather a little easier. Our global economic outlook is positive for the next couple of years, but risks are weighted to the downside.

Exchange rates have a critical impact on the cost structure of the resource industry. To improve clarity on the macroeconomic forecasts that underpin our commodity analysis, Wood Mackenzie publishes regular updates and forecasts on the currencies that impact the markets we look at. We forecast bilateral exchange rates by assessing fundamental drivers, including interest rate differentials, relative economic growth rates, productivity of the tradable goods sector, and the current account balance.