Global oil demand would be dominated by China, and to a lesser extent by India and Brazil in 2024, International Energy Agency (IEA) said in a report on February 15.
IEA, however, said the expansive post-pandemic growth phase in global oil demand has largely run its course as growth eased from 2.8 million barrels per day (bpd) in the third quarter of 2023 to 1.8 million bpd in Q4 of 2023. The deceleration in oil demand would gather pace in 2024, with world oil demand growth forecast to average 1.2 million bpd, only half last year’s expansion, it added.
“As in 2023, gains will be dominated by a few key countries, most notably China, and to a lesser extent India and Brazil. The three major economies are set to account for 78% of growth in global oil demand in 2024, that is forecast to reach a new peak of 103 mb/d,” the report said.
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IEA said global oil supply in January posted a sharp decline of 1.4 million bpd due to extreme weather conditions in North America and OPEC+ supply cuts. “Extreme weather conditions shut in more than 900 kb/d of production across North America. The steep loss coincided with fresh OPEC+ voluntary output cuts of around 300 kb/d, resulting in a massive 1.4 mb/d m-o-m decline in global oil supply,” it said.
The organisation, however, remains optimistic on oil supply for 2024 and expects supply to increase by 1.7 million bpd to a record 103.8 million bpd in 2024, with non-OPEC+ providing 95 percent of the incremental barrels.
Oil prices in January
Amid intensifying hostilities in the Middle East and North American supply outages, ICE Brent futures rose by $5 per barrel during January, first monthly gain since September, said IEA.
Given heightened geopolitical risks and low global oil inventories, a modest surplus might help contain market volatility, the report said. Crude oil prices are currently trading around $80 per barrel.
“While oil on water surged by 60 mb (thousand barrels) in December due to end-year tax considerations and as a number of tanker owners diverted ships away from the Red Sea to around the Cape of Good Hope, observed onshore stocks declined by nearly 40 mb,” it added.
IEA observed that low oil inventories exacerbate the price impact of supply and demand shocks and might limit the industry's ability to respond to unexpected strength in demand or disruptions to supply.
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