IEA cuts 2024 oil demand growth estimate to 1.2 mil b/d, eyes 1.1 mil b/d in 2025

The International Energy Agency on April 12 cut its estimate of 2024 oil demand growth to 1.2 million b/d from 1.3 million b/d citing “exceptionally weak” first quarter deliveries in the OECD and reduced consumption by vehicles, and forecast growth of 1.1 million b/d in 2025.

It also cut its estimate of growth in refinery throughput in 2024 to 1 million b/d from 1.2 million b/d in its previous report, highlighting reduced Russian runs stemming partly from drone attacks, unplanned outages in Europe, and tepid Chinese economic activity. For 2025, it forecast refinery throughput would grow by another 830,000 b/d to 84.2 million b/d.

The IEA in its monthly oil market report forecast global oil output would rise by 770,000 b/d this year, in line with last month’s report, with growth going on to double to 1.6 million b/d in 2025, led by non-OPEC+ producer nations, with output in the latter rising 1.4 million b/d.

Four non-OPEC+ countries – the US, Brazil, Guyana and Canada – are expected to add 1.2 million b/d of supply in 2024 and 1 million b/d in 2025, the IEA said.

Reflecting increases from countries outside OPEC+, the IEA increased its estimate of the fall in demand for OPEC+ crude this year to 500,000 b/d, forecasting a “call” for OPEC+ crude of 41.8 million b/d, and a further fall in 2025 of 300,000 b/d, to 41.5 million b/d.

“If the bloc were to produce in line with that call, effective spare capacity could top 6 million b/d [in 2025] – excluding the COVID-19 period its largest ever supply buffer,” it said.

“OPEC+ market share has already slipped to all-time lows after the alliance removed close to 2 million b/d of supply from the market since the end of 2022, while non-OPEC+ ramped up by nearly the same amount. That trend looks set to continue in 2024, when non-OPEC+ boosts output by a further 1.6 million b/d. OPEC+ supply is projected to fall by 820,000 b/d, provided cuts are maintained through the second half of the year,” the IEA said.

Cautious on demand

Analysts at S&P Global Commodity Insights are somewhat more bullish than the IEA on demand, with the latest short-term outlook forecasting liquids demand growth of 1.7 million b/d in 2024, slowing to 1.2 million b/d in 2025.

OPEC in its own monthly oil market report on April 11 maintained its forecasts for global demand growth of 2.2 million b/d in 2024, slowing to 1.8 million b/d in 2025.

Oil prices remain generally elevated thanks to geopolitical nervousness centered on the Middle East. The Platts Dated Brent North Sea benchmark was assessed at $91.81/b on April 11, up 62 cents on the day, S&P Global data showed.
Source: Platts