International Energy Agency (IEA) revised down its global oil demand forecast to 1.2 million barrels per day (bpd) for 2024, down by roughly 100,000 bpd from previous month’s predictions, amid weak OECD deliveries.
IEA said in its monthly oil market report that with post-Covid rebound now largely complete and electric vehicle fleet expanding, oil demand growth is expected to slow down to 1.2 million bpd and 1.1 million bpd in 2024 and 2025, respectively.
“World oil demand growth has nevertheless been revised down by roughly 100 kb/d since last month’s Report, to 1.2 mb/d, following exceptionally weak deliveries in the OECD at the start of the year. Our newly-released 2025 forecast in this month’s Report shows the pace of expansion will decelerate further, to 1.1 mb/d next year as the post-Covid 19 rebound has run its course,” the report said.
IEA added that world oil demand growth has continued to lose momentum as growth was at 1.6 million bpd in the first quarter of 2024, 120,000 bpd lower than IEA’s previous forecast.
The report said non-OECD countries, led by China, would dominate oil demand growth for 2024 whereas consumption in the OECD would decline. “Non-OECD countries dominate the outlook, with forecast demand set to increase by 1.3 mb/d in 2024 and 1.2 mb/d in 2025. By contrast, consumption in the OECD will decline by 60 kb/d in both years,” said IEA.
IEA noted that benchmark crude prices escalated in March and early April as heightened geopolitical tensions coincided with the prospect of a tighter supply-demand balance through the remainder of the year. “ICE Brent crude futures hit a six-month high of $90/bbl in early April amid escalating tensions in the Middle East, attacks on Russian refineries and an extension of OPEC+ outputs cuts through June,” it said.
Global oil supply
IEA said non-OPEC+, led by the US, is set to drive world supply growth through 2025. Meanwhile, it forecasts global output to rise by 770,000 bpd in 2024 to 102.9 million bpd. Non-OPEC+ production will expand by 1.6 million bpd in 2024, while OPEC+ supply could fall 820,000 bpd if voluntary cuts remain in place, according to the report.
“OPEC+ market share has already slipped to all-time lows after the alliance removed close to 2 mb/d of supply from the market since the end of 2022, while non-OPEC+ ramped up by nearly the same amount. That trend looks set to continue in 2024, when non-OPEC+ boosts output by a further 1.6 mb/d,” said IEA.
The report said the additional volumes from the United States, Brazil, Guyana and Canada could alone come close to meeting world oil demand growth for 2024 and 2025.
For 2025, IEA predicts global growth could rise to 1.6 million bpd. Non-OPEC+ is forecast to lead gains, rising 1.4 million bpd, while OPEC+ output could increase by 220,000 bpd if curbs stay in place.
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