IEA maintains 2024 demand growth forecast at 970,000 bpd

The International Energy Agency has kept its global oil demand growth forecast for 2024 unchanged at 970,000 barrels per day, driven by the end of the post-COVID economic rebound in China.

The energy agency, however, trimmed its growth forecast for 2025 from 980,000 bpd to 950,000 bpd.

The think tank pointed out that the supply cuts by the Organization of the Petroleum Exporting Countries, and its allies, known as OPEC+ are tightening the physical market globally.

To maintain market stability, OPEC+ has made deep supply cuts since 2020. The alliance’s members are currently cutting output by a total of 5.86 millionbpd, or about 5.7 percent of global demand.

In July, the oil-producers’ alliance agreed to extend most of its deep oil output cuts for 2024 but to start phasing them out in 2025.

“Our outlook for global oil demand is largely unchanged from last month’s report, with growth projected at slightly less than 1 million bpd in both 2024 and 2025. However, a meaningful shift in drivers is becoming apparent,” said IEA.

It added: “In June, Chinese oil demand contracted for a third consecutive month, driven by a slump in industrial inputs, including for the petrochemical sector. Preliminary trade data point to further weakness in July, as crude oil imports sank to the lowest level since the stringent lockdowns of September 2022.”

The energy agency further noted that global oil demand rose by 870,000 bpd in the second quarter of this year, with a contraction in China limiting gains.

IEA added that global refinery throughputs are expected to increase by 840,000 bpd to 83.3 million bpd in 2024, while it will rise by 600,000 bpd to 83.9 million bpd next year.

According to the think tank, global observed oil inventories fell by 26.2 million barrels in June, following four months of builds totaling 157.5 million barrels.

On Aug.12, OPEC cut its forecast for global oil demand growth in 2024 citing softer expectations for China.

According to the alliance, world oil demand will rise by 2.11 million bpd in 2024, down from growth of 2.25 million bpd expected last month.

“This slight revision reflects actual data received for the first quarter of 2024 and in some cases for the second quarter, as well as softening expectations for China’s oil demand growth in 2024,” OPEC said in the report.

OPEC added that demand growth in 2024 was still above the historical average of 1.4 million bpd seen prior to the COVID-19 pandemic in 2019, which caused a plunge in oil use, and that summer travel demand would remain robust.

“Despite the slow start to the summer driving season compared to the previous year, transport fuel demand is expected to remain solid due to healthy road and air mobility,” it said.