Global oil demand estimates worsen

The International Energy Agency (IEA) yesterday kept its forecast for global oil demand unchanged in 2024, but downgraded estimates for 2025, citing the impact of Chinese consumption, according to Reuters.

Weaker economic growth in China is limiting global oil demand, but developed economies, particularly the United States, which consumes a third of the world's gasoline, are making up for losses in the Asian country, the IEA noted in its monthly report.

In the US, this summer's travel season should be the strongest since the pandemic, and the reduction in production by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) is affecting the physical market in a big way, IEA estimated.

"At this moment, the supply does not manage to keep pace with the demand during the summer, which leads to a deficit on the market", said the IEA.

The price of oil rose by over 3% on Monday, in the fifth consecutive session of growth, amid fears regarding the escalation of the conflict in the Middle East, which could affect crude oil supplies, but yesterday they returned to the negative course.

The futures price of a barrel of Brent oil for delivery in October fell by 0.3% in the first part of the day yesterday, at ICE Futures Europe, reaching $82.03. On Nymex USA, the price of West Texas Intermediate (WTI) oil for September delivery fell by 0.2% to $79.88 a barrel at 05:39 local time.

We remind you that, on Monday, the Organization of the Petroleum Exporting Countries (OPEC) worsened its estimate for the growth of global oil demand in 2024, citing weaker than expected data from the first semester and lower expectations from China, according to Reuters. In its monthly report, OPEC said it expects global oil demand to rise by 2.11 million barrels per day (bpd) in 2024 (from a level of 2.25 forecast last month) and with 1.78 million bpd in 2025 (from 1.85 million bpd in July), notes Agerpres.

"This slight revision reflects current data received for the first half of 2024 and, in some cases, the second quarter, as well as lower expectations from China this year. Despite a slow start to the travel season this summer compared to last year, demand for transportation fuels is expected to remain solid due to road traffic and air mobility," OPEC said.

This is the first reduction in OPEC's 2024 forecasts since July 2023.

It should be noted that OPEC oil production increased in July, as the return of Saudi Arabia's supply and lower increases in other countries offset the impact of voluntary supply reductions by other members and the wider OPEC+ alliance, according to Reuters.

OPEC pumped 26.70 million barrels per day last month, an increase of 100,000 barrels per day compared to June, according to the quoted source. The increase came despite OPEC maintaining most of its output cuts until the end of 2025 to support the market amid sluggish demand growth, high interest rates and rising US output.