The International Energy Agency announced today, Thursday, that global oil demand recorded its slowest growth rate since 2020 in the first half of 2024, due to the weakness of the economy in China, which prompted the Agency to reduce its expectations for the entire year.
Demand increased by 800,000 barrels per day in the first six months of 2024 compared to 2.3 million barrels in the same period last year, according to the agency.
For the full year, global oil demand is expected to grow by about 900,000 barrels per day, 70,000 barrels less than the agency’s previous estimate, that would take total demand to nearly 103 million barrels per day.
Oil prices have fallen this year amid concerns about the global economic outlook.
‘The main driver of this decline is China, which is experiencing a rapid slowdown, with consumption contracting year-on-year in July for the fourth consecutive month,’ the Paris-based agency added.
China is one of the world’s largest oil consumers and importers, but the world’s second-
largest economy is struggling amid weak consumer spending, a property crisis and high unemployment.
The agency also pointed to China’s shift away from oil in favor of alternative energy.
It said that increasing sales of electric vehicles are reducing demand for motor fuel, while the development of a massive high-speed rail network is limiting growth in the domestic air travel sector.
Outside China, ‘oil demand is weak at best,’ the agency said.
This week, benchmark Brent North Sea crude fell below $70 a barrel for the first time since December 2021.
The Agency added that the price decline prompted key OPEC+ members to postpone a planned plan to increase supply and extend voluntary supply cuts until the end of November. The delay gives OPEC+ ‘some time to assess the demand outlook for next year,’ in addition to the impact of production disruptions in Libya.
But with supply from non-OPEC+ countries rising faster than overall demand, the group ‘could look forward to a large surplus, even if additional rest
rictions remain in place.’
Source: National Iraqi News Agency