In a new report sent to Rigzone this week, analysts at Standard Chartered announced that they expect a “key milestone in the post-pandemic recovery” to be reached this August “when we forecast demand will set a new all-time high of 102.24 million .barrels per day”.
The analysts noted in the report that, according to their calculations, the “all-time high” of global demand was set in August 2019 at 102.2 million barrels per day. As for a discussion of whether oil’s fundamentals are healthy or weakening, the new all-time high could be looked at in two ways, analysts noted in the report.
“The positive interpretation is simply that it is an all-time high,” analysts said in the report.
“The negative is that it has taken four years to return to the previous peak and four years of normal growth would have been about five million barrels per day,” they added.
“In other words, getting 102 million barrels a day back is healthy, losing four years of potential demand growth is not,” they stated.
In the report, analysts forecast that the new all-time high will be exceeded in both November and December and that demand will rise above 103 million barrels per day for the first time in June 2024.
“Our model contains only two months in the rest of the current decade in which global oil demand falls below 100 million barrels per day: the current month and January 2024,” the analysts said in the report .
In a statement sent to Rigzone on Wednesday, Bjarne Schieldrop, SEB’s chief commodity analyst, noted that the group expects total demand to rise by two million barrels a day year-on-year in 2023 to 101.9 million barrels per day
Ninety percent of demand growth is expected to come from non-OECD countries, Schieldrop noted in the statement, adding that “jet fuel demand will account for 57% of growth in demand as global aviation continues to normalize post-Covid-19.”
Schieldrop warned in the statement that “darkening clouds in the macro sky worry investors” and said there are “significant signs of weakening global diesel demand alongside falling manufacturing PMIs.”
“Historically, recessions lead to a cyclical downturn in manufacturing activity, softer diesel demand, and falling oil prices. Therefore, investors are wary of buying into the bullish story based solely on- se in OPEC’s cuts,” he said.
“However, cross currents make demand growth difficult to assess. Circumstances are much more complicated than in previous recessionary cycles because global demand for jet fuel is recovering post-Covid -19 and after China’s recent reopening,” Schieldrop added.
“Second, manufacturing PMIs in China and India are rising, while OECD PMIs are falling,” he said.
In its April OMR, the International Energy Agency (IEA) projected this Global oil demand will increase by two million barrels per day by 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.
In its March OMR, the IEA predicted that global oil demand growth would reach 102 million barrels per day in 2023, and in its February OMR, the IEA forecast that demand would reach 101, 9 million barrels per day. In its January OMR, 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.”
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 this year. In its previous STEO, which was released in March, the EIA projected that total global consumption of oil and other liquids would reach 100.90 million barrels per day by 2023.
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