The International Energy Agency (IEA) cut its forecast for global oil demand in 2024 for the second month in a row due to falling consumption in Europe and the United States and a marked slowdown in China.
In its monthly oil market report published this Wednesday, the IEA said overall demand will rise by just 950,000 barrels a day this year compared with 2023, 100,000 less than it forecast in May.
Growth rates are forecast to accelerate in 2025, but by at least one million barrels per day. This means the market will absorb an average of 103.2 million barrels per day this year and 104.2 million barrels per day next year.
If in May it had already adjusted its expectations for 2024 down by 140,000 barrels per day, it is now doing so taking into account March consumption data: an annual drop of 815,000 barrels per day in the countries of the Organization for Cooperation and Economic Development (OECD), which could not be offset by an increase of 650,000 people in the rest of the world.
Moreover, preliminary data for April and May indicate a trend that may even have been boosted by China: the Asian giant’s output growth of 800,000 barrels per day in the first quarter fell to just 95,000 barrels per day in April.
Another important factor in the market, which has already had an impact on prices, which have fallen in recent weeks from their April peak, is the rise in inventories due to the dual effect of increased production and weak demand.
In April, global stockpiles increased by 19.3 million barrels, and data (still incomplete) for May indicates a new increase of 48.2 million barrels.
On supply, the IEA also adjusted its forecast to take into account recent changes and estimates that supply will increase by an average of 690,000 barrels per day this year, with an increase of 1.4 million barrels per day for the portion of countries outside to OPEC+. manufacturers.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies (mainly Russia) were forced to qualify their announcement of an end to voluntary cuts by saying they could be frozen depending on market conditions.
This is why the IEA (which brings together the main consumer countries in the OECD) believes that the final balance will be a reduction in production in 2024.
For 2025, global supply growth is projected to be 1.8 million barrels, of which only 320,000 barrels will come from the OPEC+ cartel and 1.5 million from other producers (with the US again leading).
Author: Lusa
Source: CM Jornal
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