Global Oil Demand Growth Forecast Lowered by Morgan Stanley for 2024

Morgan Stanley has adjusted its global demand growth forecast for 2024 from 1.2 million barrels per day to 1.1 million barrels per day. This revision is influenced by various factors such as slower economic growth in key markets, increased adoption of alternative energy sources, and evolving global economic conditions.

China’s economic slowdown has significantly impacted its oil consumption, with the rapid rise in LNG truck sales leading to a decline in diesel demand. Additionally, the proliferation of NEVs in China is reducing gasoline demand.

High inflation, rising interest rates, and geopolitical tensions are also contributing to a subdued outlook for global oil demand. Industries are transitioning towards alternatives to oil, with the rise of EVs and LNG further decreasing oil demand.

Non-OPEC supply growth has slowed down, leading to a tighter oil market in the short term. While non-OPEC supply is expected to pick up in the coming months, there is caution about whether it will align with previous growth projections.

OPEC’s production cuts have helped maintain market balance, but the potential surplus in 2025 due to softening demand and increased supply is a concern. The balance between OPEC and non-OPEC supply will be crucial in determining oil price dynamics.

Morgan Stanley has revised its price forecasts, with Brent expected to average around $80 per barrel in Q4 2024 and gradually decline to $75 per barrel by mid-2025. The recent dip in Brent prices highlights the market’s forward-looking nature.

Analysis:
– Global oil demand growth forecast for 2024 has been revised lower by Morgan Stanley.
– Factors such as China’s economic slowdown, rise in LNG truck sales, and adoption of alternative energy sources are impacting oil consumption.
– High inflation, rising interest rates, and geopolitical tensions are contributing to a subdued outlook for global oil demand.
– Non-OPEC supply growth has slowed down, leading to a tighter oil market in the short term.
– OPEC’s production cuts have helped maintain market balance, but there are concerns about a potential surplus in 2025.
– The balance between OPEC and non-OPEC supply will be crucial in determining oil price dynamics.
– Price forecasts have been adjusted, with Brent expected to average around $80 per barrel in Q4 2024 and decline to $75 per barrel by mid-2025.

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