The International Energy Agency (IEA) has reported that global oil demand grew at its slowest rate since 2020 during the first half of 2024, primarily due to a significant economic downturn in China. Demand increased by 800,000 barrels per day (bpd) in the first six months of 2024, compared to 2.3 million bpd over the same period in 2023. The IEA has consequently revised its full-year demand forecast downward.
The slowdown in China, a major global oil consumer, is a key factor behind this trend. The country's oil consumption contracted year-on-year for the fourth consecutive month in July, attributed to weak consumer spending, a crisis in the property sector, and high unemployment. Additionally, China is shifting away from oil in favor of alternative energy sources, such as electric vehicles and high-speed rail, which are reducing the demand for road fuel and domestic air travel.
The IEA’s revised forecast for global oil demand growth in 2024 is now set at 900,000 bpd, down from its previous estimate by 70,000 bpd. Total global demand is expected to approach 103 million bpd.
Oil prices have weakened in response to these demand concerns, with Brent North Sea crude dropping below $70 per barrel for the first time since December 2021. In response, OPEC+ members, including Saudi Arabia and Russia, have decided to extend voluntary supply cuts until the end of November rather than increasing output as initially planned. This extension aims to assess demand prospects for the coming year and address the impact of supply disruptions in Libya. However, with non-OPEC+ supply increasing faster than overall demand, there is a potential for
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