LONDON, April 12 (Reuters) – The International Energy Agency (IEA) trimmed its forecast for 2024 oil demand growth on Friday, citing lower than expected consumption in OECD countries and a slump in factory activity. The Paris-based energy watchdog lowered its growth outlook for this year by 130,000 barrels per day (bpd) to 1.2 million bpd, adding that the release of pent-up demand by top oil importer China after easing COVID-19 curbs had run its course.“Delivery data for many countries came in on the soft side, as unusually warm late-winter weather curtailed OECD heating fuel use by more than normal,” the IEA said in its monthly oil report.
“Additionally, the protracted factory slump in advanced economies continued to depress demand for industrial fuels.”
Demand growth in 2025 will edge down to 1.1 million bpd, with global GDP growth forecast to remain steady and electric vehicle expansion expected to gather pace, it said.
The IEA noted that China’s contribution to the global increase in oil demand is set to weaken from 79% in 2023 to 45% in 2024 and 27% next year.
The agency’s report came after crude futures soared to five-month highs last week-with Brent crude breaking above $90 a barrel, boosted by fears of supply disruptions due to growing geopolitical hostilities and signs of a tighter market following OPEC+ extension of output cuts. Yet, gains are capped by an unexpected build in U.S. inventories and fading expectations that the Federal Reserve will start cutting interest rates in June after a hotter-than-expected U.S. inflation reading. The international benchmark currently trades around $90 a barrel, while WTI, the U.S. oil gauge, is around $86 a barrel.