The International Energy Agency (IEA) has revised its global oil demand growth forecast for 2024 upward for the third consecutive time. Despite the increase, the IEA’s projection remains lower than that of the Organization of the Petroleum Exporting Countries (OPEC). Both entities have been at odds in recent years over various aspects of future oil demand.
The IEA, providing advice to industrialized nations, anticipates a global oil consumption increase of 1.24 million barrels per day (bpd) in 2024. This figure, up by 180,000 bpd from the previous projection, falls below OPEC’s forecast of 2.25 million bpd. The ongoing conflicts in the Middle East have raised concerns about oil supply, but the IEA suggests that, barring significant disruptions, the market appears well-supplied in 2024. However, a surplus could emerge if OPEC and its allies proceed with unwinding output cuts in the second quarter.
The upward revision by the IEA is attributed to improving global economic growth, lower crude prices in the fourth quarter of the previous year, and the expansion of China’s petrochemicals sector.
Despite uncertainties and geopolitical tensions, the IEA asserts that the market is reasonably well-supplied in 2024. The organization highlights the potential for a surplus if OPEC and its allies decide to reverse output cuts. The report also underscores the expected record-setting increase in world oil supply by 1.5 million bpd, reaching a new high of 103.5 million bpd in 2024. This surge is fueled by substantial output from the United States, Brazil, Guyana, and Canada.
The IEA acknowledges the impact of the post-pandemic recovery nearing completion, modest economic growth in major economies, energy efficiency improvements, and the growing electric vehicle fleet, contributing to a halving in the rate of demand expansion year on year in 2024.
While the IEA recognizes the potential for disruptions due to rising geopolitical tensions in the Middle East, it emphasizes that, with higher-than-expected non-OPEC+ production increases, the market remains reasonably well-supplied.
As the producer group and the OPEC+ alliance have implemented output cuts to support the market, the IEA warns that a substantial surplus could occur if these cuts are unwound in the second quarter, despite a potential small deficit at the beginning of the year due to the ongoing cuts.
Get comprehensive supply chain report news updates at The Supply Chain Report. For international trade tools, see ADAMftd.com.
#GlobalOilDemand2024 #IEAForecast #OPECDemand #OilMarketOutlook #OilSupplyForecast #MiddleEastTensions #EnergyMarketTrends #EconomicGrowth #PetrochemicalExpansion #USBrazilGuyanaCanada #OilSurplus #NonOPECProduction #ElectricVehicleGrowth #EnergyEfficiency #OutputCuts
