Demand for oil is slowing and the main reason for this is the slow recovery of the Chinese economy, according to the latest monthly oil analysis of the International Energy Agency (IEA). The data showed that in the fourth quarter, oil demand growth reached 1.8 million barrels per day to a total of 102.1 million barrels per day. In the third quarter, the increase was in volume of 2.8 million barrels per day.
The experts’ expectations are for a further slowdown in demand – to 1.2 million barrels in 2024, compared to 2.3 million barrels in 2023. China, India and Brazil will continue to be the engines of growth, the agency adds. The three countries account for 78% of global demand, which is likely to reach a new peak of around 103 million barrels per day.
In January 2024, oil supply to the market shrank significantly to 1.4 million barrels per day, and the reason for this was the Arctic cold that gripped Texas, which closed almost all facilities in the region, as well as the reduction in production in OPEC +. However, the record production in the countries outside the organization – the USA, Brazil, Guyana and Canada – in recent months has largely rendered the actions of the oil cartel meaningless. Deliveries in the first month of the year reached 102.1 million barrels per day.
Despite the good balance, however, the price of the leading grades of oil on the market rose by an average of 5 dollars per barrel amid tensions in the Middle East and closed drilling in the United States. The price of the Brent variety reached about 83 dollars per barrel. However, the start of the year was difficult, and the forecast is that in the first quarter of the year, the growth of production in non-OPEC+ countries will exceed the growth of demand, which should calm the tension.
