IEA: World oil demand will rise faster than expected next year

By | December 18, 2023

In 2024, there will be a 1.1 million barrels per day (bpd) increase in global consumption.

The International Energy Agency (IEA) predicted on Thursday that global oil demand would grow more quickly than anticipated next year, indicating a strong prognosis for oil use soon. 

The Paris-based IEA predicted in a monthly report that global consumption would increase by 1.1 million barrels per day (bpd) in 2024, up 130,000 bpd from its previous estimate. The IEA attributed this increase to improved US economic prospects and lower oil prices.

OPEC and the IEA are producer organizations representing industrialized nations. Despite improvements, their outlooks for 2024’s demand still significantly differ. OPEC, in its recent monthly report released on Wednesday, upheld its estimation. It projects a growth of 2.46 million barrels per day in global oil demand for 2023. OPEC projects a 2.25 million bpd oil demand increase in 2024, which is likewise unchanged from last month.

Declining Demand

According to the IEA, the 2024 revision shows “a somewhat improved GDP outlook compared with last month’s report.” “This applies especially to the U.S. where a soft landing is coming into view.”

“Falling oil prices act as an additional boost to oil consumption,” it stated. Even after OPEC+—which comprises OPEC oil-exporting countries and allies including Russia—announced on November 30 a further round of production restrictions for the first quarter of 2024, the price of oil fell this week to a six-month low of around $72 per barrel.

Following the release of the IEA report, crude saw an almost 2% increase in trading on Thursday, closing at $76.

In its report, the IEA made significant adjustments. It lowered its fourth-quarter 2023 estimate by over 400,000 barrels per day. Additionally, the IEA revised its projection for oil demand growth by 90,000 barrels per day, now standing at 2.3 million barrels per day.

The IEA predicts below-trend economic growth in crucial economies. Efficiency gains and a rapidly growing electric vehicle fleet contribute to cutting the rate of demand expansion by half next year.

UAE Oil market

American exporters still have a lot of options in the UAE’s oil and gas industry. Among the top ten oil-producing countries in the world is the United Arab Emirates (UAE). Abu Dhabi is home to around 96% of the nation’s approximately 100 billion barrels of known oil reserves, placing it sixth in the world. 3.2 million barrels of petroleum and liquids are produced daily on average in the United Arab Emirates. 

Operating across all industry sectors, Abu Dhabi National Oil Company (ADNOC) is a global leader in the oil and gas business. By 2030, ADNOC hopes to attain its maximum sustainable production capacity of 5 million barrels. 

(Source: Gulf News)

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