Forecasts by the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) for oil demand growth in 2024 diverge the most in at least 16 years, Reuters found.
► Subscribe to the Telegram channel “Ministry of Finance”: main financial news
What not so with the forecasts
According to IEA forecasts released in February, oil demand in 2024 will increase by 1.22 million barrels per day, while in its February report OPEC predicted an increase of 2.25 million barrels per day.
The difference between forecasts is just over 1 million barrels per day, or about 1% of global demand.
The gap between the IEA and OPEC forecasts means they are sending different signals to traders and investors about how strong oil demand will be in 2024 year and in the long term, as well as the speed of transition to cleaner fuel, notes Reuters.
“The IEA has a very clear understanding that the energy transition will move at a much faster pace,” said former IEA head of oil markets Neil Atkinson. “Both agencies have driven themselves into a dead end, which is why they have such a huge gap in demand forecasts,” he notes.
Reuters analyzed how IEA and OPEC oil demand forecasts changed from the crisis of 2008 to the beginning of 2024. In July 2008, oil futures hit record levels of nearly $150 a barrel, compared with about $80 now. Having studied monthly reports of organizations for 16 years, Reuters came to the conclusion that the gap in this February in terms of barrels was the maximum for this period.
OPEC and IEA also differ on medium-term forecasts. The IEA expects oil demand to peak by 2030, driven by a shift to cleaner fuels.
OPEC disagrees – the cartel's 2045 forecast says demand will not peak until this time, this will be driven by increased production outside industrialized countries and the “reversal of some initial net-zero policies.”
Commenting on the gap in its 2024 forecasts, the IEA said slowing demand this year marks a return to trends observed before the pandemic, and this slowdown is already visible in oil supplies.
OPEC said its forecast for demand growth in 2023 of 2.5 million barrels per day was only slightly lower than the initial one announced in July 2022.
