28/10/2024 by OilStoreAdministrator
The executive director of the International Energy Agency (IEA), Fatih Birol, has warned that the world’s demand for crude oil looks set to remain relatively weak.
Speaking to Bloomberg in an interview, Birol said:
“This year, global oil demand is very weak, much weaker than previous years, and we expect this will continue because of one word—China.”
This is in accordance with the IEA’s latest Monthly Oil Report, which said:
“Chinese oil demand is particularly weak, with consumption dropping in August – its fourth consecutive month of declines.”
Birol also reiterated the report’s conclusion that with demand growth slowing this year to only 862,000 barrels per day (bpd), the markets will be well supplied with crude oil.
Indeed, companies like ExxonMobil, the maker of the Mobil SHC gear oil, are increasing production in the US and places like Guyana, while the OPEC+ group has spare capacity due to its production cuts. Birol said this should lead to a surplus in the new year.
This should benefit consumers through lower prices, such as at petrol pumps. Nevertheless, the IEA says it is ready to take action should there be any supply shocks.
The IEA believes that the use of oil, coal and natural gas could all peak by the end of this decade. This is disputed by OPEC and oil-producing countries like Saudi Arabia, though, who believe that despite the energy transition, there will be strong growth in the demand for oil from developing countries.
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