- IEA Maintains Forecast of Less Than 1 Million BPD Oil Demand Growth in 2024 and 2025
- Weak Chinese Oil Consumption Limits Global Demand Growth, Strong US Gasoline Demand Offsets
- Non-OPEC Supply Increases Expected to Exceed Demand Growth, Potential Inventory Builds Ahead
Global oil demand is projected to increase by less than 1 million barrels per day (bpd) in both 2024 and 2025, according to the International Energy Agency (IEA). This forecast remains unchanged as Chinese consumption contraction has been a limiting factor this year. The IEA reported a rise of 870,000 bpd in global oil demand in the second quarter, with China’s demand declining for a third consecutive month in June.
While China’s demand weakened, the strong gasoline consumption in the US has been a positive offset. The agency noted that the US economy, a significant consumer of global gasoline, has shown resilience with a robust service sector supporting increased miles driven.
“The US economy, where one-third of global gasoline is consumed, has outperformed peers, with a resilient service sector buttressing miles driven,” the agency said.
Despite the current deficit in the oil market due to peak summer demand, supply struggles to keep pace. This has led to global inventory draws in June and July. However, supply increases are expected to surpass consumption growth this year and next.
Even without OPEC+ easing cuts, global inventories could build by 860,000 bpd next year as non-OPEC+ supply is set to grow by around 1.5 million bpd in 2024 and 2025, exceeding expected demand growth.
OPEC recently revised its forecasts for global oil demand growth downward for this year and next, marking the first adjustment since issuing its initial estimate for 2024. The gap between OPEC’s assessment and the IEA’s forecast remains over 1 million bpd.