Global oil demand has hit a record peak and may move higher in August, threatening to prolong a recent rally in crude prices, the International Energy Agency said yesterday.
Demand reached an all-time high of 103mn barrels a day in June, driven by better than expected economic growth in OECD countries, strong summer air travel and surging oil consumption in China, particularly for petrochemical production, the IEA said in its monthly oil report.
The data shows that global efforts to cut carbon emissions are yet to completely halt the rise in on oil demand, just as the summer in the northern hemisphere has been rocked by record temperatures and wildfires.
The IEA said demand could hit another peak this month and was on track to average 102.2mn b/d in 2023, the highest ever annual level. It means demand will have risen by 2.2mn b/d over the course of the year, with 70 per cent of the growth coming from China, the IEA said
. Rising demand has pushed oil prices higher in the past month, aided by cuts in supply made by Saudi Arabia and Russia.
Production from Opec+ countries dropped in July to the lowest level since October 2021 after Saudi Arabia, which leads the group, cut its own output by 1mn b/d in a move to shore up prices.
It said last week that it would extend Brent crude prices have risen by 10
per cent over the past month the cut into September and could even
reduce output further.
The measure, combined with output
reductions carried out by Russia, will
plunge Opec+ production in the third
quarter to a two-year low, according to
the IEA’s forecast.
Brent crude, the international oil
benchmark, was trading at about $87 a
barrel yesterday, up 10 per cent over the
past month — with some analysts
predicting a return to $100 a barrel oil
The rallying crude price has already
provoked concern in the US, where petrol costs have reached a nine-month
high just as President Joe Biden steps up
his bid for re-election next year.
Oil demand was expected to rise again
in 2024 but at slower rate, the IEA
warned, as it trimmed its demand
growth forecast for 2024 by 150,000
b/d. “With the post-pandemic recovery
having largely run its course and as the
energy transition gathers pace, growth
will slow to 1 mb/d in 2024,” it said.
The growth would be driven by China
again, with 60 per cent of the additional
in demand coming from the country, it