IEA cuts oil growth forecast on sluggish China demand

With Chinese demand for oil depreciating for the consecutive fourth month and the tepid demand for oil in rest of the world, the International Energy Agency (IEA) said on Thursday that global oil demand growth had lost its steam and is likely to be at 900,000 barrels per day (bpd) in 2024, compared to 2.1 million bpd in 2023.

According to the agency’s monthly estimate, September growth too was down by 70,000 bpd from its August data.

IEA in its Oil Market Report said that China remains the main driver for the oil demand downturn, the country witnessed sluggish oil consumption annually, dropping by 280,000 bpd in July for the fourth month straight. The IEA stated that this drop was due to a broad-based economic slowdown and the country’s transition to alternative fuels. The IEA said that demand growth in other countries also remains tepid.

The IEA Oil Market Report (OMR) is considered to be one of the world’s most authoritative and timely sources of data, forecasts, and analysis on the global oil market. It includes detailed statistics and commentary on oil supply, demand, inventories, prices, refining activity, and oil trade for IEA and selected non-IEA countries.

According to a Paris-based agency, the estimated oil demand in 2025 is likely to remain subdued and will be around 950,000 bpd.

With oil consumption facing a downturn, oil supply remains strong, IEA reported that the global oil supply rose by 80,000 bpd to 103.5 million barrels per day, with outages caused by a political dispute in Libya combined with maintenance in Norway and Kazakhstan offset by higher flows from Guyana, Brazil, and elsewhere.

The IEA reported that annual gains in oil supply are likely to strengthen to 2.1 mb/d in 2025 from 660 000 bpd this year.

The Oil Market Report mentioned that the oil supply from non-OPEC (Organization of the Petroleum Exporting Countries) is estimated to increase by 1.5 million bpd this year and next, while OPEC+ may fall by 810 kb/d in 2024 but rise by 540 kb/d next year if voluntary cuts stay in place.

The IEA said in its Oil Market Report that global oil demand growth in the first half of 2024 was only 800,000 bpd year-on-year, the lowest pace of growth since 2020.