Global oil demand will hit new highs and is expected to average 102.2 million barrels per day (bpd) this year, driven by summer air travel, strong Chinese petrochemical activity, and higher oil use in power generation, the International Energy Agency (IEA) said on Friday.
World oil demand is set to grow by 2.2 million bpd this year, with China accounting for more than 70% of growth, the agency said in its closely-watched Oil Market Report (OMR) for August.
The growth estimate is unchanged from last month’s report, in which the IEA cut its global oil demand growth forecast for the first time this year, due to persistent economic headwinds.
Demand in developed economies was revised up for May and June, with overall consumption returning to growth in the second quarter after two quarters of contraction. Moreover, Chinese demand was also stronger than expected, reaching fresh highs despite persistent concerns over its economy.
World oil demand hit a record 103 million bpd in June and August could see yet another peak, the IEA noted.
The agency, however, cut today its estimate for global oil demand growth for 2024 by around 150,000 bpd, and sees next year’s growth slowing to 1 million bpd year over year.
“With the post-pandemic rebound running out of steam, and as lacklustre economic conditions, tighter efficiency standards and new electric vehicles weigh on use, growth is forecast to slow to 1 mb/d in 2024,” the agency said in the report.
For this year, refinery throughputs are set to reach a summer peak of 83.9 million bpd in August, up 2.4 million bpd since May and 2.6 million bpd higher than a year ago, according to IEA’s projections.
“The increase in refined product output has failed to ease product market tightness, pushing gasoline and middle distillate cracks to near record-highs. High sulphur fuel oil cracks provided further support to margins, which pushed above 2022 levels in July,” the IEA said