Global oil demand hits record and may rise further, says International Energy Agency

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World oil demand has hit a report and will rise additional in August, threatening to delay a latest rally in crude costs, the Worldwide Power Company stated on Friday.

Demand reached an all-time excessive of 103mn barrels a day in June pushed by higher than anticipated financial development in OECD international locations, robust summer time air journey and surging oil consumption in China, significantly for petrochemical manufacturing, the IEA stated in its month-to-month oil report.

The information exhibits that international efforts to chop carbon emissions are but to fully halt the rise in on oil demand, whilst report temperatures and wildfires, concurrently with extreme flooding, has hit the globe .

The IEA stated demand might hit one other peak this month and was on observe to common 102.2mn b/d in 2023, the very best ever annual degree. It means demand could have risen by 2.2mn b/d over the course of the 12 months, with 70 per cent of the expansion coming from China, the IEA stated.

Rising demand has pushed oil costs larger up to now month, aided by cuts in provide made by Saudi Arabia and Russia.

Manufacturing from Opec+ international locations dropped in July to the bottom degree since October 2021 after Saudi Arabia, which leads the group, minimize its personal output by 1mn b/d in a transfer to shore up costs. It stated final week that it will prolong the minimize into September and will even cut back output additional.

The measure, mixed with output cuts made by Russia, will plunge Opec+ output within the third quarter to a two-year low, in line with the IEA’s forecast.

Brent crude, the worldwide benchmark, was buying and selling at $87 a barrel on Friday, up 10 per cent over the previous month, with some analysts predicting a return to $100 a barrel oil this 12 months.

The rallying crude value has already provoked concern in the US, the place petrol prices have reached a nine-month excessive simply as President Joe Biden steps up his bid for re-election subsequent 12 months.

Oil demand was anticipated to rise once more in 2024 however at slower charge, the IEA cautioned, because it trimmed its demand development forecast for 2024 by 150,000 b/d.

“With the post-pandemic restoration having largely run its course and because the vitality transition gathers tempo, development will sluggish to 1 mb/d in 2024,” it stated.

The expansion can be pushed by China once more, with 60 per cent of the extra demand coming from the nation, it added. Beijing has set a goal of peak carbons emissions earlier than 2030, with a purpose to be carbon impartial by 2060.