Home MarketsAsia IEA lowers 2024 oil demand growth forecast as prices rise

IEA lowers 2024 oil demand growth forecast as prices rise

by SuperiorInvest

The International Energy Agency on Friday lowered its forecast for oil demand growth in 2024, citing “exceptionally weak” deliveries from the OECD, a largely complete post-Covid-19 rebound and a fleet of electric vehicles in expansion.

In its latest monthly oil market report, the IEA said it had revised down the forecast by around 100,000 barrels per day (bpd) to 1.2 million bpd.

The global energy watchdog said it expected the pace of expansion to slow further to 1.1 million bpd next year “as the post-Covid 19 rebound has run its course.”

The IEA report comes amid a rally in oil prices due to heightened tensions in the Middle East, as energy market participants closely monitor the prospect of supply disruptions from the oil-producing region.

Iran, which is a member of OPEC, has vowed to retaliate after it accused Israel of bombing its embassy in the Syrian capital of Damascus earlier this month.

The attack has raised tensions in a region already grappling with the ongoing war between Israel and Hamas. Israel has not claimed responsibility for the attack.

International reference Brent Crude oil futures for June delivery were trading 1% higher at $90.62 a barrel at 10:00 a.m. Friday in London, while U.S. West Texas Intermediate futures for May delivery were up 1%. 1.2% to trade at $86.07 per barrel.

“We are seeing an increase in [electric vehicle] “Sales, especially in China and also in Europe, take into account the demand for gasoline, but also in the United States,” Toril Bosoni, head of the IEA's oil industry and markets division, told the “Street” program on Friday. Signs Europe” from CNBC.

“There has been a lot of talk that sales will not increase as much as perhaps expected, but sales of electric vehicles and increased fuel efficiency in the automobile fleet are reducing demand for gasoline, at least in advanced economies and particularly in China”.

An oil pump is shown near Callon Petroleum on March 27, 2024 in Monahans, Texas.

Brandon Bell | fake images

When asked about some of the main concerns related to the security of oil supplies, Bosoni responded: “We are obviously watching the Middle East very closely. The continued attacks on oil tankers in the Red Sea are a key concern, but also the escalation of tensions between Iran and Israel. “And then we see tensions between Russia and Ukraine continuing, with attacks on Russian refineries.”

“So there are several stress points in the oil market today that we are watching very closely and that could have significant impacts…if there were any significant outages,” he added.

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