A Petroleos de Venezuela SA oil pumpjack on Lake Maracaibo in Cabimas, Zulia state, Venezuela, on Friday, Nov. 17, 2023.
Gaby Oraa | Bloomberg | Getty Images
The International Energy Agency on Thursday mentioned proof of softening international oil demand is mounting and a slowdown is predicted to proceed into 2024, reaffirming a starkly totally different outlook in contrast to oil producing group OPEC.
The IEA mentioned oil market sentiment had turned “decidedly bearish” in latest weeks, even after some members of OPEC and non-OPEC oil-exporting allies — collectively identified as OPEC+ — on Nov. 30 announced a brand new spherical of voluntary manufacturing cuts in the primary quarter of subsequent 12 months.
Oil prices have been greater on Thursday morning, paring losses after not too long ago falling to their lowest degree since late June on gnawing oversupply concerns.
International benchmark Brent crude futures with February expiry traded 1.4% greater at $75.31 per barrel at 9 a.m. London time, whereas U.S. West Texas Intermediate crude futures for front-month January traded 1.3% greater at $70.36 per barrel.
In its newest month-to-month oil market report, the IEA mentioned international oil demand was on course to rise 2.3 million barrels per day to 101.7 million barrels per day in 2023, noting that this forecast “masks the impression of an extra weakening of the macroeconomic local weather.”
The vitality company warned that “proof of a slowdown in oil demand is mounting,” with the tempo of enlargement poised to “gradual drastically” from 2.8 million barrels per day year-on-year in the third quarter to 1.9 million barrels per day in the ultimate three months of 2023.
It prompted a downward revision of the IEA’s international consumption development forecast of almost 400,000 in the fourth quarter, with weaker-than-anticipated demand in Europe, Russia and the Middle East accounting for the majority of that adjustment.
Looking forward, the IEA mentioned oil consumption development is projected to halve subsequent 12 months, falling to 1.1 million barrels per day as international financial development stays under pattern in main economies, and as Covid-19-related distortions fade.
IEA vs. OPEC
OPEC, in the meantime, struck a markedly different tone in its newest month-to-month report.
The oil producer group, which has frequently clashed with the IEA in latest years over points such as peak oil demand and the need for investment in new supplies, on Wednesday mentioned that it remained “cautiously optimistic” about oil market dynamics in 2024.
OPEC blamed “exaggerated concerns” about oil demand development for a latest downturn in oil prices and maintained its comparatively excessive oil use prediction for subsequent 12 months.
It reaffirmed its outlook for world oil demand development in 2023 at 2.46 million barrels per day, roughly in line with the IEA’s forecast.
For subsequent 12 months, OPEC mentioned it sees world oil demand at 2.25 million barrels per day, unchanged from the earlier month, however a sharply greater estimate than the IEA’s prediction of 1.1 million barrels per day for the interval.