Int. Energy Agency revises up oil demand forecast for ’23

The International Energy Agency (IEA) on Wednesday revised up its global oil demand forecast for 2023 by around 240,000 barrels per day (bpd) compared to last month’s assessment.

Demand is now estimated to reach around 102.3 million bpd in 2023, ‘a new record’ with a year-on-year rise of 2.4 million bpd, according to the IEA’s latest oil market report.

‘Global oil demand continues to defy the challenging macroeconomic climate and is set to rise by 2.4 million bpd in 2023, outpacing last year’s 2.3 million bpd increase as well as earlier expectations,’ the IEA said.

For 2024, the IEA predicts a slowdown in demand as ‘the post-pandemic recovery will largely have run its course, and oil demand growth is set to slow to 860,000 bpd.’

– Oil supply forecast to hit record highs

Total oil supply is forecast to reach ‘record high levels of 101.3 million bpd this year and 102.3 million bpd next year,’ it said.

Despite high output levels, global supply growth is forecast to lose momentum next year, rising by 1 million bpd compared to 1.4 million bpd in 2023.

Adjustments to OPEC+ member quotas through 2024 mean that, ‘following a 470,000 bpd decrease this year, OPEC+ output could fall a further 200,000 bpd next year.’

Non-OPEC+ leads world supply growth through next year, adding 1.9 million bpd in 2023 and 1.2 million bpd in 2024.

– World oil production decreases

Last month, world oil supply fell by 660,000 bpd to 100.6 million bpd after extra cuts from some OPEC+ producers kicked in.

Saudi Arabia, with its voluntary cut of 500,000 bpd agreed in April, led the monthly drop in global supply.

Saudi Arabia promised to slash output by a further 1 million bpd in July to a two-year low of 9 million bpd, signaling further global output declines for the coming months.

Last month, the ‘overall decline was stemmed by a seasonal 330,000 bpd rise in biofuels along with higher flows from Nigeria and elsewhere,’ it concluded.

• International Energy Agency (IEA)