IEA Raises 2024 Oil Demand Forecast

The settling down of post-pandemic turbulence and a cloudy economic outlook will rein in oil demand growth this year, the International Energy Agency said on Thursday, even as shipping disruptions provide a short-term boost. “(Growth) reverts toward its historical trend after the extreme volatility of the pandemic years,” the Paris-based agency said in its monthly oil report. “The global economic slowdown acts as an additional headwind to oil use, as do improving vehicle efficiencies and expanding electric vehicle fleets.”

The IEA sees growth this year at 1.3 million barrels per day, down a full million bpd from 2023, but up by 110,000 bpd from its previous month’s forecast as Houthi attacks in the Red Sea have helped lengthen supply routes. Dovish signals from central banks indicated a path out of economic doldrums, the IEA said, but subdued economic data in China remains a concern. The IEA’s growth forecast lags that of the Organization of the Petroleum Exporting Countries, which is more bullish on the economy, by nearly 1 million bpd.