BAKU, Azerbaijan, October 3. The outlook for oil demand growth in 2024 appears to be relatively robust, with an expected increase of approximately 1.5 million barrels per day (b/d), BMI, a Fitch Solutions company believes.
The lion's share of this growth is anticipated to be contributed by emerging markets (EMs), while developed markets (DMs) are likely to witness only marginal growth in consumption, Trend reports.
While there is a forecasted slight acceleration in the eurozone economy for the coming year, with growth hovering at a modest 0.9 percent, structural trends in oil demand, including advancements in energy efficiency and the shift towards alternative fuels, are expected to dampen the prospects for demand growth in DMs. Additionally, BMI's economists foresee a significant slowdown in real GDP growth in several major DM economies, including the United States, Canada, and Japan, further clouding the demand outlook.
In contrast, EMs are expected to exhibit more robust growth. The collective real GDP growth forecast for the EM universe stands at 4.1 percent in 2024, up from 4 percent in 2023. Notably, Mainland China's growth is projected to decelerate from 5.2 percent this year to 5 percent in the next. While BMI currently accounts for only a 321,000 b/d increase in Chinese fuel demand in 2024, down from 467,000 b/d in 2023, there is potential upside risk to this projection. Factors such as the expansion of the domestic petrochemicals sector and a recovery in the aviation sector offer optimistic prospects, coupled with an expected uptick in economic activity in the second half of 2024. However, Mainland China faces various domestic and external challenges, and it is unlikely that additional stimulus measures will completely offset these hurdles.
Nevertheless, the relative weakness in Mainland China is expected to be balanced by stronger gains in other EMs, with demand growth outside of China anticipated to rise from 563,000 b/d this year to 1.05 million b/d in the following year, according to BMI's analysis.
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