© Reuters. FILE PHOTO: An oil pump of IPC Petroleum France is seen throughout sundown exterior Soudron, close to Reims, France, February 6, 2023. REUTERS/Pascal Rossignol/File Photo
By Natalie Grover and Alex Lawler
LONDON (Reuters) -The International Energy Agency (IEA) on Tuesday raised its oil demand development forecasts for this yr and subsequent regardless of slower financial development in practically all main economies, though its 2024 outlook stays a lot decrease than that of producer group OPEC.
The Paris-based IEA stated the market might shift into surplus at the beginning of 2024 having been saved in a “significant deficit” via year-end by voluntary cuts from Saudi Arabia and Russia which final till the tip of December.
“For now, with demand still exceeding available supplies heading into the Northern Hemisphere winter, market balances will remain vulnerable to heightened economic and geopolitical risks – and further volatility ahead,” the IEA stated in a month-to-month report.
Oil has weakened to round $82 a barrel for from a 2023 excessive in September close to $98. Concern about financial development and demand has pressured costs, regardless of help from provide cuts by OPEC and its allies, and battle within the Middle East.
The IEA joins the Organization of the Petroleum Exporting Countries in elevating its oil demand development forecast for 2023. Demand in 2023 has been supported by resilient U.S. deliveries and file September demand from China, the IEA stated.
In 2023, the IEA expects world demand to rise by 2.4 million barrels per day (bpd), up from 2.3 million bpd seen beforehand and bringing its view nearer to that of OPEC, which on Monday nudged up its forecast to 2.46 million bpd.
SLOWDOWN IN VIEW
For 2024, the IEA raised its oil demand development forecast to 930,000 bpd from 880,000 bpd. Expectations are underpinned by hopes of rate of interest cuts and the latest fall in crude costs, the IEA, the vitality adviser to industrialised nations, stated.
This continues to be properly under OPEC’s forecast of two.25 million bpd. The distinction – 1.32 million bpd – is equal to roughly 1% of every day world oil use and interprets into greater than the every day manufacturing of an OPEC member reminiscent of Libya.
OPEC and the IEA have clashed in recent times over points such because the long-term oil demand outlook and the necessity for funding in new provides.
The IEA stated the 2024 demand slowdown will come up as “the last phase of the pandemic economic rebound dissipates and as advancing energy efficiency gains, expanding electric vehicle fleets and structural factors reassert themselves.”
The 2024 outlook shall be in focus on the subsequent assembly of OPEC and its allies, referred to as OPEC+, on Nov. 26. The group’s present deal limits provide into 2024, though the additional Saudi and Russian voluntary cuts final till the tip of December.