IEA lowers forecast for growth in oil demand

Oil use is expected to slow its growth in 2024, according to a new report from the International Energy Agency (IEA)

The world is expected to use about 102.2 million barrels of oil per day as of this year, a 2.2 percent increase from 2022 figures. That growth is now expected to slow slightly into 2024, falling to about a 1 percent increase, the agency noted.

“With the post-pandemic rebound running out of steam, and as lacklustre economic conditions, tighter efficiency standards and new electric vehicles weigh on use, growth is forecast to slow to 1 mb/d in 2024,” the report states.

This year, a reduction in Saudi oil production has helped raise prices, the IEA said. The U.S. has attempted to raise output in an attempt to offset rising prices, and refineries have also increased production.

Gasoline is $3.84 per gallon on average nationally, according to AAA. That’s a 30 cent increase from the same time last month. However, prices are still below last summer’s highs.

“Global oil prices moved steadily higher during July and into early August, reflecting a market tightening long projected by this Report,” the IEA said. “Deepening OPEC+ supply cuts have collided with improved macroeconomic sentiment and all-time high world oil demand.”

The weather has also helped raise prices, as high temperatures force some refineries to slow their production. That’s forcing oil producers and refineries to dip into their inventories, the report states.

Additional oil price rises are expected into next year as OPEC+ nations including Saudi Arabia continue to cut their output, according to the agency.