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Oil consumption in China, India, and the Middle East has surprised to the upside in recent weeks, prompting the International Energy Agency (IEA) to revise up its oil demand growth forecast for both this year and next.
Despite an expected fourth-quarter contraction of global oil demand by 110,000 barrels per day (bpd) compared to the same period of 2021, recent data on consumption in non-OECD regions has pointed to more resilient demand than expected earlier, the IEA said on Wednesday in its Oil Market Report for December.
The agency now sees global oil demand growing by 2.3 million bpd this year, up by 140,000 bpd compared to the growth expected in last month’s report. Demand growth in 2023 is expected at 1.7 million bpd, an upward revision of 100,000 bpd compared to the November estimates. Next year, global oil demand is set to reach 101.6 million bpd, the IEA said.
“Despite the seasonal slowdown in world oil demand and continued macro-economic headwinds, recent oil consumption data have surprised to the upside. This was especially apparent in non-OECD regions, including China, India and the Middle East,” noted the agency.
“Strong gasoil use in key consuming countries outweighs weak European and Asian petrochemical deliveries,” the IEA added.
In supply, the IEA estimates that global oil supply fell by 190,000 bpd to 101.7 million bpd in November, breaking a five-month uptrend, as Saudi Arabia and other Gulf producers reduced output as part of the OPEC+ pact.
“A steeper drop is expected next month as the EU ban on Russian crude imports and the G7 price cap take effect,” the IEA said.
In its monthly report on Tuesday, OPEC left its global oil demand growth estimates unchanged, expecting growth of 2.5 million bpd this year and 2.2 million bpd next year. But the cartel warned that “As the year 2022 draws to a close, the recent global economic growth slowdown with all its far-reaching implications is becoming quite evident. The year 2023 is expected to remain surrounded by many uncertainties, mandating vigilance and caution.”
