EIA raises 2024 global oil demand forecast despite China pessimism
The Energy Information Administration of the US Department of Energy (EIA) has raised its forecasts for growth in demand for oil and liquid hydrocarbons (LH) in the world in 2024, while simultaneously reducing expectations regarding supply, News.az reports citing Neftegaz.ru .
EIA presented its monthly report on August 6, 2024.Demand for oil
According to the EIA forecast, in 2024, global demand for oil and liquid hydrocarbons will grow by 1.14 million barrels per day, to 102.94 million barrels per day, in 2025 - by 1.61 million barrels per day, to 104.55 million barrels per day. The forecast for demand growth in 2024 compared to the previous report has been increased by 30 thousand barrels per day, for 2025 - decreased by 160 thousand barrels per day. The EIA explains the reduction in the forecast for 2025 by the situation in China, where a slowdown in economic growth should lead to a reduction in diesel fuel consumption.
The issue of falling demand in China is now in the focus of Western economists.
A number of experts point out that demand for petroleum products in China, especially diesel fuel, is lagging behind expectations due to the country's slowing economic growth, a protracted downturn in the real estate sector and a lack of jobs.
The International Energy Agency (IEA) has been the most consistent in highlighting the issue of weak business activity in China, which is putting downward pressure on oil prices. China's official statistics reflect a reduction in imports amid rising prices - the latest data from the GTU of the PRC show that over 7 months of 2024, China reduced oil imports by 2.4%, to 317.81 million tons (10.89 million barrels per day), with its cost growing by 2.8%, to $193.33 billion. Despite the gloomy forecasts for the Chinese market, the EIA believes that countries outside the Organization for Economic Cooperation and Development (OECD) are the drivers of growth in global demand for oil and liquid hydrocarbons. In particular: in non-OECD countries, demand will grow by 1.09 million bbl/d in 2024, to 57.24 million bbl/d, and by 1.39 million bbl/d in 2025, to 58.63 million bbl/d (forecasts for both years have been reduced): in China, demand for oil and liquid hydrocarbons will increase by 280 thousand barrels per day in 2024, to 16.34 million barrels per day, in 2025 - by 320 thousand barrels per day, to 16.66 million barrels per day, in India, demand in 2024 will increase by 280 thousand barrels per day, to 5.57 million barrels per day, in 2025 - by 300 thousand barrels per day, to 5.87 million barrels per day; in OECD countries in 2024 demand will grow by 40 thousand barrels per day, to 45.69 million barrels per day, in 2025 - by 230 thousand barrels per day, to 45.92 million barrels per day (the previous report predicted a decrease in demand in the OECD in 2024): the growth in demand in the OECD will be provided by the United States, where in 2024 demand will increase by 200 thousand barrels per day, to 20.45 million barrels per day, in 2025 - by 180 thousand barrels per day, to 20.63 million barrels per day, In the rest of the OECD countries, demand is expected to decline in 2024, but this will be leveled out in 2025.
EIA's optimism about U.S. demand is driven by rising jet fuel consumption due to increased air travel, up 3% in 2024 and 2025.
As a result, in 2025 U.S. jet fuel consumption will exceed pre-pandemic levels in 2019.
Offer
EIA has lowered its forecast for oil and liquid hydrocarbons supply growth on the world market in 2024 and 2025 by 70 thousand barrels per day and 90 thousand barrels per day, respectively.
In 2024, production is expected to increase by 570 thousand barrels per day, to 102.36 million barrels per day, in 2025 - by 2.08 million barrels per day, to 104.44 million barrels per day.
It is expected that: in 2024, OPEC + production will decrease by 1.34 million barrels per day, to 35.73 million barrels per day; in 2025, it will increase by 790 thousand barrels per day, to 36.52 million barrels per day, OPEC oil production in 2024 will decrease by 220 thousand barrels per day, to 26.67 million barrels per day, in 2025 it will increase by 480 thousand barrels per day, to 27.15 million barrels per day, non-OPEC countries will increase oil and liquid hydrocarbon production by 750 thousand barrels per day in 2024, to 70.36 million barrels per day, and by 1.65 million barrels per day in 2025, to 72.01 million barrels per day, with the main increase coming from the USA, Canada, Brazil and Guyana.
With oil supply forecasts down, deficit estimates have increased significantly.
The deficit estimate for 2024 has increased from 480,000 bbl/d to 580,000 bbl/d, and for 2025, from 80,000 bbl/d to 110,000 bbl/d.
Oil production in the USA
EIA has lowered its forecast for US oil production in 2024-2025 by 20 thousand barrels per day and 80 thousand barrels per day, respectively.
In 2024, US oil production will increase by 300 thousand barrels per day, to 13.23 million barrels per day, compared to 12.93 million barrels per day in 2023. In 2025,
production is expected to increase by 460 thousand barrels per day, to 13.69 thousand barrels per day.
In its monthly forecasts, EIA now publishes detailed forecasts for production in the main production regions, including the largest shale basins.
In particular, production: on the Gulf of Mexico shelf in 2024 will decrease by 70 thousand barrels per day, to 1.8 million barrels per day, in 2025 - will increase by 50 thousand barrels per day, to 1.85 million barrels per day, in the 48 continental states - will grow in 2024 by 370 thousand barrels per day, to 11.01 million barrels per day, in 2025 - by 430 thousand barrels per day, to 11.44 million barrels per day, of which in the largest shale basins: Permian - in 2024 production will increase by 430 thousand barrels per day, to 6.29 million barrels per day, in 2025 - by 310 thousand barrels per day, to 6.6 million barrels per day, Bakken - in 2024 will increase by 60 thousand barrels per day, to 1.28 million barrels per day, in 2025 - by 100 thousand barrels per day, to 1.38 million barrels per day, Eagle Ford - in 2024 it will decrease by 60 thousand barrels per day, to 1.1 million barrels per day, in 2025 it will grow by 50 thousand barrels per day, to 1.15 million barrels per day.
Oil production in Russia
EIA slightly adjusted its forecast for oil and liquid hydrocarbons production in Russia.
It is expected that in 2024, production in Russia will decrease by 360 thousand barrels per day, to 10.39 million barrels per day, and in 2025, it will increase by 80 thousand barrels per day, to 10.47 million barrels per day.
Compared with the previous report, the forecast for oil and liquid hydrocarbons production in Russia in 2024 has been increased by 20 thousand barrels per day, and for 2025, it has been left unchanged.
Oil prices
The Brent spot price ended July at the 2024 level of $81 per barrel, but averaged $85 per barrel for the month, up $3 per barrel from the June average.
EIA expects Brent to return to the $85 to $90 per barrel range by the end of 2024 as the deficit widens.
However, EIA has lowered its overall oil price forecasts for 2024 and 2025.
EIA has lowered its Brent price forecast for 2024 to $84.44 from $86.37 per barrel and for 2025 to $88.38 per barrel from $88.38 per barrel. to $85.71/bbl.
For WTI oil, the EIA lowered its forecast for 2024 from $82.03/bbl to $80.21/bbl, and for 2025 - from $83.88/bbl to $81.21/bbl.
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