IEA slashes oil-demand projection citing poor industrial activity, weather patterns

IEA trims 2024 oil demand growth forecast, widening gap with OPEC view

The International Energy Agency (IEA) trimmed its 2024 oil demand projections for the second month in a row on May 15, amid poor industrial activity and a mild weather in Europe.

The Paris-based energy watchdog lowered its growth outlook for this year by 140,000 barrels per day (bpd) to 1.1 million bpd, largely citing weak demand in developed OECD nations. The outlook for 2025 is comparatively unchanged, with the pace of growth now marginally surpassing 2024 at 1.2 mb/d., IEA added.

“Poor industrial activity and another mild winter have sapped gasoil consumption this year, particularly in Europe, where a declining share of diesel cars in the fleet were already undercutting consumption,” said the IEA, which advises most major economies.

"Combined with weak diesel deliveries in the United States at the start of the year, this was enough to tip OECD oil demand in the first quarter back into contraction," the agency added.

Meanwhile, OPEC guided a strong growth forecast for global oil demand earlier this week. It expects world oil demand to rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.  Both forecasts were unchanged from last month.

"The health of global oil demand will likely be a key topic for discussion when OPEC+ ministers meet in Vienna on 1 June to chart production policy for the remainder of the year," IEA added.