IEA trims global oil demand by 140,000 barrels per day, says demand to rise by 1.1 million barrels per day

The International Energy Agency, an autonomous inter-governmental organisation, that provides policy recommendations, data and analysis on the energy sector, has slashed its global oil demand for 2024.

IEA said in its report that global oil demand is set to rise by 1.1 million barrels per day (mb/d) in 2024, 1,40,000 barrels per day less than projected in the April report as weak deliveries, notably in Europe, shifted first-quarter Organisation for Economic Co-operation and Development (OECD) demand into contraction.

The outlook for 2025 is comparatively unchanged, with the pace of growth now marginally surpassing 2024 at 1.2 mb/d, it said.

Futures of Brent crude, the global benchmark, were trading 0.42% higher at $83.10 per barrel on Thursday morning. Meanwhile, West Texas Intermediate futures were trading 0.53% higher at $79.05 per barrel.

At the same time, it said that world oil supply is estimated to rise by 580 kb/d this year to a record 102.7 mb/d as non-OPEC+ output rises by 1.4 mb/d while OPEC+ (Organization of the Petroleum Exporting Countries and its allies) production falls 840 kb/d, assuming that voluntary cuts are maintained.

IEA pointed out that global refinery margins fell across all regions in April, as weaker-than-expected demand growth underpinned a collapse in middle distillate cracks and lower throughput levels.

The agency expects annual growth in refinery activity to accelerate from just above zero in the first quarter of 2024 to 500 kb/d in the second quarter and to 1.8 mb/d in the second half of 2024.

IEA believes that for next year, the market looks more balanced. “Even if OPEC+ voluntary production cuts were to stay in place, global oil supply could jump by 1.8 mb/d compared with this year’s more modest 580 kb/d annual increase,” it said.

The agency believes that the June meeting of OPEC+ may also look closely at global oil inventories as a gauge for the delicate balancing act of world oil demand and supply. “Preliminary data show further stock builds in April as onshore inventories skyrocketed after oil on water was discharged,” it said.