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Informist, Thursday, Dec. 12, 2024

 

MUMBAI – The International Energy Agency expects global oil demand to grow by 1.1 million barrel per day to 103.9 million barrels per day in 2025. The agency lowered its global oil demand growth forecast for 2024 to 840,000 barrels per day from 920,000 barrels per day projected in November to 102.8 million barrels per day.

 

The demand growth in both the years will be driven by petrochemical feedstocks, while demand for transport fuels will continue to be constrained by behavioural and technological progress, the agency said in its monthly Oil Market Report for December. "While non-OECD (Organisation for Economic Co-operation and Development) demand growth, notably in China, has slowed markedly, emerging Asia will continue to lead gains in 2024 and 2025," it said.

 

Global oil supply rose by 130,000 barrels per day in November to 103.4 million barrels per day on a continued recovery in production from Libya and Kazakhstan, the agency said. The total oil supply is set to rise by 630,000 barrels per day this year, and a further 1.9 million barrels per day in 2025 to 104.8 million barrels per day, even in the absence of the Organization of the Petroleum Exporting Countries and its allies' production cuts, the agency said. 

OPEC and allies delayed the unwinding of additional voluntary production cuts until April, at the earliest. Oil supply outside of OPEC and its allies is set to rise by around 1.5 million barrels per day in both 2024 and 2025, led by the US, Brazil, Guyana, Canada, and Argentina.

 

"... the latest OPEC+ decision does not remove the uncertainty about when the unwinding of the cuts will actually start. In this context, our forecasts exclude a return to higher production quotas until a final phase-out timeline is confirmed. On that basis, our current market balances still indicate a 950,000 barrels per day supply overhang in 2025. If OPEC+ does begin unwinding the voluntary cuts from the end of March 2025, this overhang would rise to 1.4 million barrels per day," the energy watchdog said.

 

Global oil inventories plunged by 39.3 million barrels in October, led by a sharp decline in oil products as low refinery activity coincided with a rise in global oil demand. OECD industry stocks fell by 30.9 million barrels to 2.77 billion barrels. Provisional data suggests global inventories rebounded in November, the energy watchdog said.

 

Refinery throughputs are expected to reach an annual peak of 84.3 million barrels per day in December, almost 3 million barrels per day higher than in October when maintenance and economic run cuts constrained activity, it said.

 

In terms of prices, Brent crude oil futures were largely unchanged in November at around $73 per barrel. Prices moved in a relatively narrow range of $5 per barrel because of concern about oil supply and faltering oil demand growth. At 1730 IST, the price of West Texas Intermediate crude oil on the New York Mercantile Exchange was $70.41 per barrel, while that of Brent crude on the Intercontinental Exchange was $73.59 per barrel.  End

 

US$1 = INR 84.86

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Akul Nishant Akhoury

 

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