BAKU, Azerbaijan, December 20. The Oxford Institute of Energy Studies (OIES) has revised global oil demand growth projection for 2024, increasing it from 220 kb/d to 1.4 mb/d, compared to the current year's estimate of 2.1 mb/d, Trend reports.
The enhanced forecast for 2024 is attributed to the alleviation of several potential downside risks to the prevailing consensus on growth.
Firstly, central banks have recognized advancements in managing inflation and have indicated a path for potential rate cuts in 2024. Secondly, despite the recent tightening of monetary policies over the past couple of years, the projected global growth for 2024 suggests a smooth deceleration (2-2.5 percent). Thirdly, China's attainable 5 percent growth target for 2023 remains achievable, with the resilience of oil demand outweighing prevailing macroeconomic challenges.
Consequently, our outlook for global demand growth in 2024 has been revised upward to 1.4 mb/d, an increase from the previous estimate of 1.2 mb/d. The anticipated gains are particularly concentrated in non-OECD regions, with an additional 135 kb/d, primarily driven by an upward adjustment in Chinese demand, now forecasted to grow by 570 kb/d compared to the previous estimate of 470 kb/d. OECD demand sees a modest increase of 90 kb/d, reaching 20 kb/d, thereby narrowly avoiding contraction, with the United States contributing to a 70 kb/d rise.
Although the 2024 outlook is weaker than the current year, it signifies a normalization of non-OECD demand growth to the 2010-19 average (1.4 mb/d), while OECD growth falls slightly short by 110 kb/d. Consequently, global demand growth in 2024 is projected to dip only marginally below the pre-COVID 2010-19 average of 1.5 mb/d.
Follow the author on X: @Lyaman_Zeyn