Global oil demand is expected to rise by between 1.6 million and 2 million barrels per day (bpd) in the second half of the year, Saudi Aramco’s chief executive Amin Nasser said on Tuesday, noting that the past week’s selloff in oil doesn’t reflect fundamentals.
Aramco sees total global oil demand at 104.7 million bpd for the full-year 2024, the top executive of the world’s largest oil company said on the second-quarter earnings call.
Some analysts expect global oil demand to rise to above 106 million bpd in the second half of the year, Nasser added.
Aramco’s view of demand growth for this year is closer to OPEC’s projections than the forecasts of the International Energy Agency (IEA), which has flagged weak Chinese consumption that could weigh on oil demand growth this year.
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Last month, the IEA kept is conservative forecasts of global oil demand growth for this year and next, expecting global demand to grow by 970,000 bpd in 2024 and by 980,000 bpd in 2025.
The agency’s forecasts continue to diverge from OPEC’s estimates by a mile, or by more than 1 million bpd, to be precise. In its July report, OPEC kept its global oil demand growth forecast for 2024 at 2.2 million bpd.
Both forecasters are set to announce next week potential upgrades or downgrades to their respective demand forecasts in the monthly reports for August, which will come after a few turbulent weeks on the markets.
Oil prices have slumped to the lowest since January with Brent down to $76 per barrel amid growing concerns about a possible recession in the United States and tepid oil demand in China. These demand concerns wiped out part of the geopolitical premium that prices got after the escalation of the Israel-Iran tensions.
But Aramco’s Nasser said today that the market has overreacted to the bearish demand signals and that “The market in my view is overreacting and the fundamentals do not support the drop in prices that we are witnessing today.”
By Tsvetana Paraskova for Oilprice.com