Oil Demand for 2024 Estimated To Rise: Everything To Know
The International Energy Agency (IEA) predicts that global oil demand will experience significant changes in 2024.
Global Oil Demand Forecast:
- The forecast indicates a higher-than-expected growth of 1.7 million barrels per day (mb/d) in the first quarter of 2024.
- However, it’s important to note that the pace of expansion is projected to slow from 2.3 mb/d in 2023 to 1.3 mb/d in 2024.
- Factors contributing to this slowdown include the return of demand growth to historical trends, efficiency gains, and the adoption of electric vehicles (EVs) that reduce oiil consumption.
Regional Contributions:
- The growth in demand primarily comes from:
- China
- India
- Brazil
Supply and Refining:
- World oil production is expected to decline by 870 kb/d in the first quarter of 2024 due to weather-related shutdowns and new restrictions from the OPEC+ group.
- Also Global supply for 2024 is forecast to increase by 800 kb/d to reach 102.9 mb/d.
- Refining margins have improved, especially in regions like the US Midcontinent, Gulf Coast, and Europe.
Inventory Trends:
- Global observed oil inventories surged by 47.1 million barrels in February.
- Offshore stocks saw significant gains due to high seaborne exports.
- However, onshore inventories declined.
- In January, global stocks plunged by 48.1 million barrels, with OECD industry stocks reaching a 16-month low.
Current Oil Prices:
- Brent crude futures rose during February, reaching $83 per barrel.
- Ongoing Houthi shipping attacks in the Red Sea also contributed to the firm bid under crude prices.
- The longer shipping routes around Africa further tightened the Atlantic Basin market. And pushed crude’s forward price structure into deeper backwardation.
Factors Influencing Demand:
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- Economic Recovery: As economies rebound from the pandemic, industrial activity and transportation are picking up, leading to increased oil consumption.
- Also Population Growth: Growing populations in countries like India and China contribute to higher energy needs.
- Transportation Sector: Despite the rise of electric vehicles (EVs), traditional gasoline and diesel vehicles also still dominate the road, impacting oil demand.
- Petrochemical Industry: lt is a key feedstock for plastics, chemicals. And other products, driving demand from this sector.
