The Worldwide Power Company on Thursday minimize its international oil demand development forecast for the primary time this yr, primarily citing a worsening financial outlook that weighs “particularly heavy” on rich nations.
The world’s main vitality watchdog stated international oil demand is now on observe to climb by 2.2 million barrels per day in 2023 to achieve a median of 102.1 million barrels per day.
China is ready to account for 70% of the demand development enhance, the IEA stated.
This forecast nonetheless represents a downward revision of 220,000 barrels per day from final month’s report, when the IEA predicted a rise of two.4 million barrels per day of worldwide development.
“Persistent macroeconomic headwinds, obvious in a deepening manufacturing hunch, have led us to revise our 2023 development estimate decrease for the primary time this yr,” the IEA stated in its newest month-to-month oil market report launched on Thursday.
“World oil demand is coming underneath strain from the difficult financial surroundings, not least due to the dramatic tightening of financial coverage in lots of superior and creating nations over the previous twelve months,” the company added.
Looking forward to subsequent yr, the IEA expects demand development to sluggish to 1.1 million barrels per day, “because the restoration loses momentum and as ever-greater automobile fleet electrification and effectivity measures take maintain.”
The IEA final month stated that international demand will trickle almost to a halt within the coming years and peak earlier than the tip of the last decade because the transition away from fossil fuels gathers tempo.
The Thursday report comes at a time when latest U.S. inflation and financial knowledge renewed hopes that the Federal Reserve could also be closing in on an finish to its fee mountain climbing cycle.
Oil costs traded barely increased on Thursday morning, extending beneficial properties month-to-date.
Brent crude futures with September expiry have been up round 0.4% at $80.42 a barrel at round 9 a.m. London time, whereas U.S. West Texas Intermediate crude futures with August supply rose 0.3% to commerce at $75.98 a barrel.