Demand for oil is more likely to hit new heights this yr, after consumption of the fossil gasoline reached a file excessive in June, in line with the Worldwide Vitality Company (IEA).
The IEA’s newest oil market report printed Friday notes that oil demand hit a file 103 million barrels a day in June, pushed by better-than-expected financial development in wealthy nations, summer season air journey and surging demand for the fossil gasoline in China, significantly for petrochemical manufacturing.
Consequently, the influential group stated it expects international oil demand to hit a median of 102.2 million barrels a day in 2023, which might be the best annual degree.
China alone, the place COVID-19 restrictions have lastly begun to be eased over the previous yr, is about to account for 70 p.c of the expansion in anticipated oil demand in 2023, it stated.
Nevertheless, whereas oil demand continues to be rising, development is about to decelerate subsequent yr because the clear power transition gathers tempo and the worldwide financial restoration from the pandemic peters out, the IEA careworn.
It predicted components equivalent to tighter power effectivity requirements and the continuing rise of electrical automobiles would serve to greater than halve oil demand development from 2.2 million barrels a day in 2023 to 1 million barrels a day subsequent yr.
“With the post-pandemic restoration having largely run its course and because the power transition gathers tempo, development will sluggish to 1 million barrel a day in 2024,” it stated.
The IEA’s findings echo current predictions made by power analyst Wooden Mackenzie, which contended in a report printed in July that oil demand would proceed to develop all through the 2020s, earlier than peaking within the 2030s when electrical automobiles (EVs) start to considerably eat away at fossil gasoline demand. The analyst predicted that whereas the speed of development in demand will begin to sluggish from 2024 onwards, consumption is not going to fall till subsequent decade.
Elsewhere in its oil market replace, the IEA famous that international stockpiles of oil are thinning after Saudi Arabia and Russia have made cuts in provide, in a transfer designed to shore up costs for the fossil gasoline. The oil report predicts that output from OPEC+ nations might fall to a two-year low in 2023.
Provide from nations that sit exterior the OPEC+ bloc is predicted to dominate world provide development subsequent yr, it predicts, with the U.S. anticipated to make up 80 p.c of worldwide 2023 provide development, or 1.2 million barrels a day.