In a new report sent to Rigzone, analysts at Standard Chartered projected that global oil demand growth “will stay above the longer-term average” in 2024 and 2025.
The analysts forecast increases of 1.54 million barrels per day this year and 1.41 million barrels next year in the report, adding that projected demand growth is led by China, at 553,000 barrels per day in 2024 and 373,000 barrels per day in 2025, and India, at 329,000 barrels per day in 2024 and 373,000 barrels per day in 2025.
According to the report, Standard Chartered expects oil demand to average 102.7 million barrels per day overall in 2024 and 104.1 million barrels per day overall in 2025. Average oil demand came in at 101.1 million barrels per day in 2023, the report highlighted.
“We expect global monthly demand to move above 104 million barrels per day for the first time in August 2024 and to move above 105 million barrels per day in August 2025,” the analysts stated in the report.
“We see non-OPEC supply growth falling behind demand growth in both years, increasing the call on OPEC crude by 520,000 barrels per day in 2024 and 880,000 barrels per day in 2025,” they added.
“We forecast that U.S. crude oil supply growth will slow from 1.009 million barrels per day in 2023 to 464,000 barrels per day in 2024 and 137,000 barrels per day in 2025, although current drilling and capex plans suggest potential downside to our forecasts,” they went on to state.
In the report, the analysts outlined that the U.S. Energy Information Administration (EIA) also expects little incremental U.S. crude oil supply in 2024.
“The weekly estimate was reduced to 13.2 million barrels per day in the latest data (for 21-28 December), and the current EIA forecast implies that the monthly average will not get back to 13.3 million barrels per day until December 2024,” the analysts said in the report.
“Our U.S. oil data bull-bear index categorizes the latest weekly data as mildly bearish, with the index falling 48.7 week on week to -15.7 week on week. Inventories seem to have been subject to some strong seasonal and end-year tax optimization effects, with large gains in products and a fall in crude,” they added.
“Refinery utilization was higher year on year in all U.S. regions; distillate output was particularly strong, with a 1.2 million barrel per day year on year rise, mainly from the Gulf Coast. Gasoline demand is higher year on year, while distillate demand is still weak,” they continued.
In its latest short term energy outlook (STEO), which was released in December, the EIA projected that total world consumption would average 101.00 million barrels per day in 2023 and 102.34 million barrels per day in 2024. A forecast for 2025 demand was not included in that STEO.
In the Energy Information Administration’s (EIA) latest oil market report (OMR), which was also released in December, the organization noted that world oil demand was on track to rise 2.3 million barrels per day to 101.7 million barrels per day in 2023 but added that “this masks the impact of a further weakening of the macroeconomic climate”.
“Global 4Q23 demand growth has been revised down by almost 400,000 barrels per day, with Europe making up more than half the decline,” the EIA said in the OMR.
“The slowdown is set to continue in 2024, with global gains halving to 1.1 million barrels per day, as GDP growth stays below trend in major economies. Efficiency improvements and a booming electric vehicle fleet also drag on demand,” it added.
The EIA report also did not include demand projections for 2025.
The next STEO is currently scheduled to be released on January 9 and the next OMR is currently scheduled to be released on January 18.
