Global Oil Demand Outlook: What Investors Need to Know in 2024
As the International Energy Agency (IEA) releases its monthly report, the forecast for oil demand is looking grim. According to Commerzbank’s Commodity Analyst Carsten Fritsch, the outlook is not optimistic.
In the first half of the year, oil demand only increased by 800,000 barrels per day compared to the previous year, a significant drop from the previous year’s growth. The IEA projects a total demand growth of 900,000 barrels per day for the year, with July marking the fourth consecutive month of year-on-year decline in oil demand in China.
The IEA’s latest projections indicate that China is expected to see a modest increase in demand of 180,000 barrels per day by 2024, a far cry from the growth rates seen in previous years. This shift in China’s demand dynamics could have broader implications on global oil markets.
Looking ahead to next year, the IEA anticipates a slight acceleration in global oil demand, with an expected increase of 950 thousand barrels per day. However, this growth is expected to be outpaced by the rise in non-OPEC oil supply, leading to a potential imbalance in the market.
As a result, the call on OPEC oil is projected to decline to an average of 26.2 million barrels per day in 2024, significantly lower than the current production levels. This could potentially force OPEC to reduce supply to prevent a surplus, as the planned production increases may exacerbate the oversupply situation.
Overall, these trends in oil demand and supply dynamics could have significant implications for investors and market participants. Understanding the shifting landscape of global oil markets is crucial for making informed investment decisions and navigating the complexities of the energy sector.