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Global oil demand will rise faster than expected next year, according to the IEA.
The global demand for oil is predicted to rise more than expected next year, according to the International Energy Agency (IEA). This indicates that, despite this week's COP28 agreement to transition fossil fuels, the prospects for the use of oil in short time remain strong.
Despite this update, there is still a significant discrepancy between the IEA forecasts, representing industrialized countries, and the group of producers OPEC in relation to projected demand for 2024. This disparity has generated conflicts in recent years, especially over issues such as long-term demand and the need to invest in new supplies of barrels per day (bpd).
World Oil Consumption Will Increase in 2024
World consumption will increase by 1,1 million barrels per day(bpd) in 2024, according to the Paris-based report, the IEA said in a monthly report, an increase of 130.000 bpd over its previous forecast, citing an improvement in prospects for the United States and prices lowest levels of oil.
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The IEA, which advocates a rapid transition away from fossil fuels, detailed the increase in its forecast for 2024 only at the bottom of page 4 of its report, after discussing other findings, including a demand slowdown in the last three months of 2023 and the increase in supply.
Influence of Oil Prices on IEA Forecasts
The 2024 revision reflects 'a slightly improved GDP outlook compared to last month's report', the IEA said. 'This is especially true in the US, where a soft landing is expected.'
'The fall in oil prices acts as an additional boost to oil consumption,' he said.
Oil has weakened to a six-month low near $72 a barrel this week, even after OPEC+, which includes oil-exporting OPEC countries and allies such as Russia, on Nov. 30 announced a new round of cuts. of production for the first quarter of 2024.
Impact of Reports on the Oil Exchange
Gross LCOc1 rose almost 2% in Thursday after the IEA report was released, trading near $76.
Demand slowdown
In the report, the IEA also cut its forecast for oil demand growth in 2023 by 90.000 bpd, to 2,3 million bpd, and cut its estimate for the fourth quarter by almost 400.000 bpd.
A reduction is expected for half at the rate of expansion demand next year. to below-trend economic growth in major economies, efficiency improvements and a fleet of expanding electric vehicles, said the AIE.
Challenges in Maintaining High Oil Prices
The extension of OPEC+ supply cuts into the first quarter of next year did little to raise prices and higher production in other countries would act as a headwind, he added.
'The continued increase in production and slowing demand growth will complicate the efforts of major producers to defend their market share and maintain high oil prices,' he said. he said.
OPEC, in a monthly report released on Wednesday, maintained its forecast for global oil demand growth in 2023 at 2,46 million bpd. In 2024, OPEC forecasts demand growth of 2,25 million bpd, also unchanged from last month.
The gap between the IEA and OPEC forecasts for 2024 has narrowed slightly but remains at 1,15 million bpd – equivalent to about 1% of the world's daily oil use and the daily production of an OPEC member such as Libya.
Oil demand analysts often have to make considerable revisions given changes in the economic outlook and geopolitical uncertainties, which this year have included the coronavirus suspension in China. locks and increase in interest rates.
(Reuters – Reporting by Alex Lawler; editing by Jason Neely and Mark Potter)
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