IEA raises 2024 global oil demand estimates amid improved outlook from US

Global oil demand is forecast to rise by a higher-than-expected 1.7 million barrels per day (bpd) in Q1 of 2024.

International Energy Agency (IEA) revised up the global oil demand growth for 2024 by 110,000 bpd from its earlier estimates, the organisation said in a report on March 14.

Global oil demand is forecast to rise by a higher-than-expected 1.7 million barrels per day (bpd) in the first quarter of calendar year 2024 on an improved outlook for the US and increased bunkering, said IEA. However, the pace of expansion would still slow from 2.3 million bpd in 2023 to 1.3 million bpd in 2024, the organisation said. In the last month’s report, IEA had forecast global oil demand at 1.2 million bpd for 2024.

Meanwhile, in an OPEC report released on March 12, the cartel said global oil demand is expected to expand by 2.2 million bpd in 2024, and by 1.8 million bpd in 2025.

The IEA report added that world oil production is projected to fall by 870,000 bpd in the first quarter of 2024, compared to the last quarter of 2023. The drop in oil production would be due to heavy weather-related shut-ins and new curbs from the OPEC+ (Organisation of Petroleum Exporting Countries and its allies) bloc.

IEA said non-OPEC+ is set to dominate gains from the second quarter, after some OPEC+ members announced to extend extra voluntary cuts. “Global supply for 2024 is forecast to increase 800,000 bpd to 102.9 million bpd, including a downward adjustment to OPEC+ output,” the report said.

The oil cartel had recently decided to extend voluntary oil supply cuts of 2.2 million barrels per day into the second quarter of 2024. IEA said benchmark crude oil prices were range bound in early March, as the market had already priced in the announced extension of OPEC+ voluntary production cuts through 2Q24.

“North Sea Dated rose by $2.13/bbl to $84.66/bbl during February as continued tanker attacks in the Red Sea lengthened supply routes and global on-land oil inventories fell for a seventh consecutive month to reach their lowest level since at least 2016,” said IEA.