The International Energy Agency (IEA) has again raised its 2024 global oil demand growth forecast, though its projection remains lower than OPEC's expectations, and said the market looked well supplied because of strong growth outside the producer group.
The IEA and the Organization of the Petroleum Exporting Countries (OPEC) have clashed in recent years over issues such as future oil demand. The IEA expects oil demand to peak by 2030 as the world shifts to cleaner fuels, a view OPEC dismissed in an article on Wednesday.
The IEA, which advises industrialised countries, on Thursday predicted global consumption will rise by 1.24 million barrels per day (bpd) in 2024. This was its third consecutive upward revision in as many months but was below Opec's 2.25 million bpd projection.
With conflict in the Middle East raising concern over supply, the IEA said that — barring significant disruptions to flows — the market looked reasonably well supplied in 2024 and a surplus could emerge if OPEC and its allies unwind output cuts as scheduled in the second quarter.
The IEA's latest upward demand growth revision, up 180,000 bpd from its previous projection, was linked to improving global economic growth and lower crude prices in the fourth quarter plus China's expanding petrochemicals sector.
"The consensus economic outlook has improved somewhat over the last few months in the wake of the recent dovish pivot in central bank policy," the Paris-based IEA said in its January report.
"The fourth-quarter 2023 slump in oil prices acts as an additional tailwind."
Oil prices kicked off the year on a weak footing as demand uncertainty offset the impact of a new round of supply cuts by OPEC and its allies, together known as OPEC+, as well as rising tensions in the Middle East.