Growth in global oil demand is set to grind to a halt in the fourth quarter of this year as an economic slowdown deepens, the International Energy Agency (IEA) said on Sept. 14, but said it would resume strongly in 2023.
The outlook preserves a relatively bullish view for robust growth next year despite economic headwinds, built on the expectation that China's COVID lockdowns will ease while growth in air travel will boost jet fuel demand.
"Global oil demand remains under pressure from the faltering Chinese economy and an ongoing slowdown in OECD economies," the Paris-based energy watchdog said in its monthly oil report.
The IEA cut its forecast for demand growth this year by 110,000 bbl/d to 2 MMbbl/d while keeping its 2023 growth forecast of 2.1 MMbbl/d.
Rich countries in OECD accounted for most of the rise in demand this year, while countries outside the group especially China will underpin growth next year provided Beijing relaxes its COVID curbs.
"Non-OECD countries will cover three-quarters of 2023's gains if China reopens as expected," the IEA added.
Offsetting the hit to demand by the economy, a switch from gas to oil for power generation will provide a 700,000 bbl/d boost in the last quarter of this year and the first of the next especially in Europe and the Middle East.
Meanwhile Russian oil exports are set for a bumpy ride as the European Union plans to impose a ban on maritime services transporting it on Dec. 5.
The ban will push Russian oil production down to 9.5 MMbbl/d by February next year, the IEA said, a 1.9 MMbbl/d drop compared to February 2022. A plan by G7 countries to cap Russian oil sales prices and not ban the trade may ease those losses.
Recommended Reading
BKV Prices IPO at $270MM Nearly Two Years After First Filing
2024-09-25 - BKV Corp. priced its common shares at $18 each after and will begin trading on Sept. 26, about two years after the Denver company first filed for an IPO.
Souki’s Saga: How Tellurian Escaped Ruin with ‘The Pause,’ $1.2B Exit
2024-09-11 - President Biden’s LNG pause in January suddenly made Tellurian Inc.’s LNG export permit more valuable. The company’s July sale marked the end of an eight-year saga—particularly the last 16 months, starting with when its co-founder lost his stock, ranch and yacht in a foreclosure.
Archrock Offers Common Stock to Help Pay for TOPS Transaction
2024-07-23 - Archrock, which agreed to buy Total Operations and Production Services (TOPS) in a cash-and-stock transaction, said it will offer 11 million shares of its common stock at $21 per share.
Offshore Guyana: ‘The Place to Spend Money’
2024-07-09 - Exxon Mobil, Hess and CNOOC are prepared to pump as much as $105 billion into the vast potential of the Stabroek Block.
Bechtel Awarded $4.3B Contract for NextDecade’s Rio Grande Train 4
2024-08-06 - NextDecade’s Rio Grande LNG Train 4 agreed to pay Bechtel approximately $4.3 billion for the work under an engineering, procurement and construction contract.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.