Global oil demand growth is slowing due to “exceptionally weak” deliveries in developed economies at the start of the year, the International Energy Agency (IEA) said on Friday as it revised down its 2024 world demand growth forecast by 100,000 barrels per day (bpd).
The rise in oil consumption continues to lose momentum, with first-quarter growth estimated at 1.6 million bpd, which is 120,000 bpd below the IEA’s previous forecast, the agency said in its Oil Market Report today.
With most of the post-Covid rebound behind us, global oil demand is set to grow by 1.2 million bpd this year and growth is set to further slow to 1.1 million bpd next year, the IEA said.
Just last month, the IEA had raised its 2024 outlook on global oil demand growth, by 110,000 bpd from the February report and expected demand growth at 1.3 million bpd for 2024, compared to 1.2 million bpd expected in the previous month’s report.
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The agency is now reversing this upward revision to oil demand growth amid “exceptionally weak” deliveries in OECD, waning effect of the post-Covid rebound, and vehicle efficiencies and an expanding EV fleet.
Global oil demand is now returning to its historical trend, Toril Bosoni, Head of Oil Industry and Markets Division, and Ciarán Healy, Oil Market Analyst at the IEA, wrote in a commentary today.
“Despite the deceleration that is forecast, this level of oil demand growth remains largely in line with the pre-Covid trend, even amid muted expectations for global economic growth this year and increased deployment of clean energy technologies,” they said.
The IEA’s demand growth estimates are well below these of OPEC, which confirmed on Thursday its forecast of global oil demand growth of 2.2 million bpd for 2024, broadly unchanged from last month’s assessment. The cartel still sees “robust growth” of 1.8 million bpd in 2025 compared to 2024.
Global oil demand in the summer is expected to be strong as consumption of transportation fuels is set to rise across the board and across regions with summer and holiday travel picking up, OPEC said on Thursday. The group sees a “robust oil demand outlook for the summer months.”
By Charles Kennedy for Oilprice.com