International Energy lowers its forecast for oil demand growth in 2024
The average oil use around the world reached 103 million barrels per day for the first time last June, and it may rise further in August, the agency added in its report, and with Saudi Arabia and its allies reducing supplies; Significantly less supply in the oil market.
The Paris-based agency continued:
“The demand for oil is rising to record levels, supported by the strength of air travel in the summer,
the increase in the use of oil in electricity generation, and the increased activity of the Chinese petrochemical sector,
while inventoriesof crude oil and petroleum products recorded a sharp decline.Inventories are expected to shrink further in the fall.”
Increased oil consumption
During the current week, oil touched its highest level in 6 months, crossing the threshold of $ 88 / barrel in London, amid the recovery of fuel use in the post-Covid phase, and the restriction of supplies by the “OPEC +” coalition led by Saudi Arabia. Brent crude futures witnessed a slight decline to trade below $87/bbl on Friday.
3 years ago from now, the decline in global demand for oil in the midst of the “Covid-19” crisis led some to speculate that consumption may be nearing its peak, especially
with the increasing popularity of remote work, and governments seeking to move away from fossil fuels to avoid climate change disasters. .
Despite growing signs of a warming planet – which was evident during heat waves and wildfires this summer in the northern hemisphere – the agency’s data shows that oil use is stronger than ever. China will account for 70% of demand growth this year, but the biggest surprise is that the developed countries, which enjoy economic flexibility, have also contributed to the recent increase in demand for oil.
Energy shift
The International Energy Agency expected the impact of the energy transition to appear on the market during the next year, amid estimates of a decline in global demand growth at that time by approximately 50% to one million barrels per day, due to the improvement in the efficiency of car operation and the increasing adoption of electric vehicles.
But in the course of this shift, supply in global markets will shrink, leaving oil stocks in developed countries at a level approximately 115 million barrels lower than their five-year average, according to the agency’s report.
The agency also predicted the depletion of 1.7 million barrels per day of global stocks in the second half of 2023, and it seems that preliminary data shows that stocks actually decreased in July and August.
Restricting OPEC supplies
Major oil consuming countries have criticized Saudi Arabia and its allies in the “OPEC +” for restricting supplies, warning that persistent high inflation will put pressure on consumers and endanger the global economic recovery. Despite this; Riyadh said it may deepen existing cuts if necessary.
Last month, production by the Organization of the Petroleum Exporting Countries (OPEC) and its partners declined, approaching its lowest level in two years, as Saudi Arabia implemented a unilateral cut of about 1 million barrels per day.
Expectations of the global market’s need for “OPEC” oil production during the fourth quarter have declined somewhat, compared to the agency’s report last month. The slightly weaker demand forecast for this period, along with a slight increase in supplies elsewhere, will reduce the need for “OPEC” production. about 400 thousand barrels per day.
[ ] And she warned that “in the event that the current production targets of the alliance continue; Oil stocks could drop significantly, with the risk of bullish prices still remaining
Tags Eastern economy/oil prices/oil prices/OPEC/oil production/oil/
