IEA changes oil supply forecast to deficit from surplus for 2024

In its oil market report for March, the International Energy Agency (IEA) increased its global oil demand growth forecast by 110,000 barrels/day to 1.3 million barrels/day for 2024. Accordingly, the global oil demand will hit a record 103.2 million barrels a day this year. The agency attributed this increase to an improved outlook for the United States and higher bunkering activities driven by the longer routes taken to avoid Red Sea attacks.

However, the rate of growth is set to decelerate to 1.3 million b/d in 2024 from 2.3 million b/d in 2023.

In Q1 2024, global oil production is expected to decrease by 870,000 barrels/day compared to the fourth quarter of 2023. This decline is attributed to severe weather-related shutdowns and production cuts from OPEC.

According to IEA, OPEC’s voluntary production cuts will remain in effect throughout 2024. Therefore, the agency now expects a slight deficit this year, instead of the surplus previously anticipated.

Meanwhile, OPEC+ will meet in Vienna on June 1 to decide on extending cuts into the second half of the year.