Friday, July 12, 2024

Oil demand could hit new records in 2024, EIA predicts

The U.S. Energy Information Administration (EIA) revealed last Tuesday, June 11, that both U.S. oil production and global oil demand are projected to reach higher records this year than previously forecast.

The agency now expects US oil production to grow by approximately 310,000 barrels per day (bpd) to 13.24 million bpd in 2024, an increase of around 40,000 bpd from the previous forecast in May. For next year, US production is estimated at around 13.71 million bpd, slightly down from the previous forecast of 13.73 million bpd.

In addition, global oil demand this year is also expected to exceed previous estimates, reaching record highs, according to the EIA’s June short-term energy outlook.

World consumption of crude oil and liquid fuels is expected to increase by 1.1 million bpd to 103 million bpd in 2024, compared to a previous forecast of around 102.8 million bpd. Next year, global demand is forecast at 104.5 million bpd, slightly up from the previous forecast of 104.3 million bpd.

Despite recent concerns about slowing consumption, upward revisions to demand growth made the EIA report modestly positive for the oil markets, according to UBS analyst Giovanni Staunovo.

Staunovo also noted that the agency had lowered its forecast for world oil production this year, now estimated at around 102.6 million bpd, compared to the previous forecast of 102.8 million bpd in May. This revision was attributed to OPEC+’s plans to increase production from the fourth quarter onwards, while the EIA expected an earlier advance from the group of producers.

The expectation of a slower increase in OPEC+ supplies should result in a reduction in global oil inventories during the first quarter of next year, potentially boosting oil prices upwards, the EIA said.

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