An oil pumping unit is displayed near the Caren Oil Company in Monahans, Texas, on March 27, 2024.
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The International Energy Agency on Friday cut its forecast for oil demand growth in 2024, citing “unusually weak” OECD deliveries, a post-Covid-19 rebound that is largely complete and an expansion in the number of electric vehicles.
The IEA said in its latest monthly oil market report that it has lowered its oil demand growth forecast for 2024 by about 100,000 barrels per day to 1.2 million barrels per day.
The global energy regulator said the expansion is expected to slow further to 1.1 million barrels per day next year “as the post-Covid 19 rebound is over”.
The IEA report comes as tensions rise in the Middle East and oil prices rebound, with energy market participants closely monitoring the prospect of supply disruptions in oil-producing regions.
OPEC member Iran has vowed retaliation after accusing Israel of bombing its embassy in the Syrian capital Damascus earlier this month.
The attack heightened tensions in the region, already mired in a war between Israel and Hamas. Israel has not claimed responsibility for the attack.
international benchmark Brent Crude oil futures for June delivery in London rose 0.8% to $90.45 a barrel at 9:30 a.m. on Friday, while U.S. West Texas Intermediate crude futures for May delivery rose nearly 1% to $85.84 a barrel.
“We are seeing a surge in (electric vehicle) sales, especially in China and Europe, and that does take gasoline demand into account, but also in the U.S.,” said Toril Bosoni, head of the IEA’s oil industry and markets unit. .” he told CNBC’s “European Signpost” program on Friday.
“There’s a lot of talk about sales growth not meeting expectations, but rising electric vehicle sales and vehicle fuel efficiency are reducing gasoline demand, at least in advanced economies, especially China.”
Asked about some of the main concerns related to the security of oil supplies, Bossoni responded: “Obviously, we are watching the Middle East very closely. The ongoing tanker attacks in the Red Sea are a major concern, but the ongoing conflict between Iran and Israel Tensions also escalated between Russia and Ukraine, and then we saw tensions continue between Russia and Ukraine, with attacks on Russian refineries.”
“So there are several tight points in the oil market today that we are monitoring closely and that could have a significant impact if there are any major outages,” she added.
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