IEA is pessimistic about world oil demand

According to the International Energy Agency (IEA), there is increasing evidence that world oil demand is slowing down.

In its latest monthly report released on December 14, the IEA estimated that global demand this year increased by 2.3 million barrels a day, to 101.7 million barrels. However, they noted that this forecast "does not yet indicate a weakening of the macro environment's impact".

They warn "there is ample evidence that oil demand is slowing". The rate of demand growth "has decreased significantly" from 2.8 million barrels a day in the third quarter to 1.9 million barrels a day in the fourth quarter.

This increase is 400,000 barrels a day lower than their previous forecast. The reason is that demand in Europe, Russia and the Middle East is weaker than forecast.

Next year, the IEA forecasts oil demand growth to be only half of the current rate, to 1.1 million barrels per day. The reason is that global economic growth is still lower than the general trend in major economies.

IEA says oil market sentiment is "clearly bearish" in the past few weeks, even after members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced at the end of November a new round of cuts, applicable in the first quarter of next year.

However, the IEA's forecast is contrary to OPEC+. In its report on December 13, OPEC+ said it was still "cautiously optimistic" about the oil market in 2024.

The organization maintains its forecast that world oil demand will increase by 2.46 million barrels a day this year and 2.25 million barrels a day next year. OPEC+ said that "concerns about oil demand are overblown" when prices recently went down. They predict that oil consumption next year will still be relatively high.

Crude oil prices went up today. Brent oil is currently up 1.4% to 75.3 USD a barrel. WTI oil increased 1.3% to 70.3 USD.