Investing.com – The International Energy Agency earlier Wednesday lowered its forecast for oil demand growth in 2024, citing weak demand in developed OECD countries, particularly in Europe.
The Paris-based organization in its report cut its growth outlook for this year by 140,000 barrels per day to 1.1 million barrels per day, and marginally raised its oil growth forecast for 2025 to 1.2 million barrels per day.
The IEA said the lower oil demand forecast in 2024 was linked to weak economic growth, especially in Europe, where a declining share of diesel cars was already undermining consumption.
“Combined with weak diesel supplies in the United States at the start of the year, this was enough to cause OECD oil demand to contract again in the first quarter,” the IEA said.
This puts the IEA’s demand forecast further at odds with the Organization of the Petroleum Exporting Countries, after the group of major producers on Tuesday stuck to its forecast that global oil demand will rise by 2.25 million barrels per day in 2024.
“The health of global oil demand is likely to be a key topic of discussion when OPEC+ ministers meet in Vienna on June 1 to map out production policy for the rest of the year,” the IEA said in its note.
“Despite the recent weakness, our current balance sheets show OPEC+ calls in the second half of this year at around 42 million barrels per day – roughly 700,000 barrels per day above April production.”
The agency also raised its forecast for global oil supply this year by 580,000 barrels per day to a record 102.7 million barrels per day, with non-OPEC+ production rising by 1.4 million barrels per day, while OPEC+ production drops by 840,000 barrels per day, assuming voluntary production cuts are maintained.
