In its monthly report, the International Energy Agency (IEA) presented a grim outlook for oil demand, according to Commerzbank’s Commodity Analyst Carsten Fritsch.
China is expected to see an increase in oil demand of 180,000 barrels per day (bpd) in 2024.
“In the first half of the year, China’s oil demand increased by only 800,000 bpd compared to the previous year, which is just one-third of last year’s growth. For the entire year, the IEA forecasts a 900,000 bpd increase in demand. However, oil demand in China fell year-on-year for the fourth consecutive month in July.”
“The IEA now projects that China’s demand will rise by 180,000 bpd in 2024. This slowdown in China, once a major driver of growth, has become a drag on overall demand. The IEA anticipates only a slight acceleration in global demand next year, with an expected increase of 950,000 bpd globally, and a rise of 260,000 bpd in China. This implies that global demand growth will lag behind the IEA’s forecast increase in non-OPEC oil supply.”
“As a result, the call on OPEC oil is expected to drop to an average of 26.2 million bpd next year, over 1 million bpd less than OPEC's current production. To avoid a surplus, OPEC would need to reduce its supply. The planned gradual increase in production could lead to a significant oversupply.”
