The International Energy Agency (IEA) is still forecasting record global oil demand this year, according to its latest Oil Market Report (OMR).
In its April OMR, the IEA projected that global oil demand will increase by two million barrels per day in 2023 to “a record 101.9 million barrels per day”. Non-OECD countries, driven by a resurgent China, will account for 90 percent of growth, the April OMR noted. OECD demand was “dragged down by weak industrial activity and warm weather” and contracted by 390,000 bpd year-on-year in the first quarter of 2023, the report said.
“While oil demand in developed countries has underwhelmed in recent months, slowed by warmer weather and sluggish industrial activity, strong gains in China and other non-OECD countries are providing strong compensation ,” the IEA stated in its April OMR.
“In 1Q23, OECD oil demand fell 390,000 bpd year-on-year, but a solid Chinese rebound lifted global oil demand 810,000 bpd above year-ago levels to 100.4 million barrels per day. A much stronger increase of 2.7 million barrels per day is expected until the end of the year, driven by a continued recovery in China and international travel,” added the AIE.
“For 2023 as a whole, global oil demand is forecast to increase by an average of two million barrels per day to 101.9 million barrels per day, with 87% of the growth non-OECD and only China more than half the global increase,” the IEA continued.
In its April OMR, the IEA noted that achieving these gains may prove challenging “as further OPEC+ cuts could reduce production by 1.4 million barrels per day from March to the end of ‘year, more than compensating for an increase of one million barrels per day in non-production of OPEC+”.
“Growth in the US shale patch, traditionally the most price-sensitive source of more production, is currently constrained by supply chain bottlenecks and higher costs,” the IEA said in the OMR.
The IEA noted in the report that its oil market balances had already adjusted in the second half of 2023, “with the potential for a substantial supply shortfall to emerge.” The latest OPEC+ cuts risk exacerbating these tensions, pushing up crude and product prices, the IEA warned the OMR.
The April OMR forecast global oil production growth to be 1.2 million barrels per day in 2023. That figure stood at 4.6 million barrels per day in 2022, the report noted.
“Non-OPEC+, led by the US and Brazil, drives the 2023 expansion, adding 1.9 million bpd. OPEC+ is expected to fall by 760,000 bpd,” the report said.
Previous OMRs, EIA Forecasts
In its March OMR, the IEA predicted that global oil demand growth would reach 102 million barrels per day in 2023. The IEA noted in that report that it expected non-OPEC+ to drive output growth world of 1.6 million barrels per day this year.
In its February OMR, the IEA projected demand to reach 101.9 million bpd and global production to rise by 1.2 million bpd in 2023. In the January OMR, the The IEA noted that global oil demand would increase by 1.9 million barrels per day in 2023 “to a record 101.7 million barrels per day.” The OMR said global oil supply growth in 2023 was reduced to one million barrels per day.
According to the US Energy Information Administration’s (EIA) latest Short-Term Energy Outlook (STEO), which was released on April 11, total world consumption of oil and other liquids will reach 100, 87 million barrels per day and total world production will reach 101.30 million. barrels per day in 2023.
“While our forecast includes production declines in OPEC and Russia, we expect global liquid fuels production to increase by 1.5 million barrels per day in 2023 due to strong growth in non-OPEC countries. “OPEC, which (excluding Russia) will increase by 2.3 million barrels per day. in our forecast,” noted the latest STEO.
Non-OPEC production growth is largely driven by countries in North and South America, according to the STEO, which noted that global liquids production is expected to increase by an additional two million barrels per day by 2024 , “driven by growth of a million in non-OPEC production”. barrels per day and by OPEC crude production, which we expect to increase by 0.9 million barrels per day when current production cuts expire at the end of 2023”.
“We forecast that global consumption of liquid fuels will increase by 1.4 million barrels per day in 2023 and by 1.8 million barrels per day in 2024,” the EIA added in the STEO.
“However, increased risks in the U.S. and global banking sectors increase uncertainty about macroeconomic conditions and their potential effects on liquid fuel consumption, increasing the possibility that liquid fuel consumption will lower than our current forecast,” the EIA warned.
In its previous STEO, which was released in March, the EIA projected that total world oil and other liquids consumption would reach 100.90 million barrels per day and total world oil and other liquids production would reach 101.47 million barrels per day in 2023.
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