In its monthly report, the International Energy Agency (IEA) painted a bleak picture for oil demand, Commerzbank’s Commodity Analyst Carsten Fritsch notes.
China to see an increase in demand of 180,000 bpd in 2024
“In the first half of the year, it increased by only 800,000 barrels per day compared to the previous year. This is only one-third of the increase in the previous year. For the year as a whole, the IEA expects demand to grow by 900,000 barrels per day. In July, demand for oil in China was down year-on-year for the fourth consecutive month.”
“The IEA now expects China to see an increase in demand of 180,000 barrels per day in 2024. The growth engine China has thus become a drag on growth. For next year, the IEA expects only a slight acceleration. Global oil demand is expected to increase by 950 thousand barrels per day, with demand in China rising by 260 thousand barrels per day. This means that global demand growth would lag behind the IEA's expected increase in non-OPEC oil supply.”
“Consequently, the call on OPEC oil will fall to an average of 26.2 million barrels per day next year. That is a good 1 million barrels per day less than OPEC's current production. OPEC would therefore actually have to reduce supply next year to avoid a surplus. The gradual increase in production that has been planned so far would result in a considerable oversupply.”
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