IEA Forecasts Weak Global Economic Conditions for 2024
August 11, 2023
Energy prices closed lower yesterday after rallying at or close to 2023 highs on Wednesday. The sell off appears to be driven by profit taking, increased concerns about China demand, the US Consumer Price Index showing inflation falling more than expected for July but remains higher than the Fed desires, and the US driving season coming to and end after Labor Day.
The US Consumer Price Index (CPI) rose 0.2% in July from June and rose 3.2% year over year. This was better than the 3.3% rise economists expected. The core CPI- less energy and food, rose 4.7% year over year, which was also better than the 4.8% rise expected. This may give the Fed more incentive to slow interest rate hikes.
OPEC left their oil growth forecast unchanged for 2023 at 2.44 million bpd and at 2.25 million bpd for 2024 in a monthly report released yesterday 8-11-2023. OPEC raised their world GDP forecast by 0.1% up to 2.7% for 2023 and 2.7% for 2024. The OPEC report showed that Saudi Arabia delivered its voluntary oil output cut of 943,000 bpd in July down to 9.013 bpd.
The IEA sees weak global economic conditions next year which will limit demand growth and take some of the pressure off prices. It see demand growth next year of 1 million bpd.
The US National Oceanic and Atmospheric Administration forecasters expect a more dangerous Atlantic storm season this year, raising their Atlantic hurricane outlook due to high sea surface temperature. It forecast 14-21 named storms, with 6-11 potentially becoming hurricanes with winds of 74 mph or greater. Two to five of those hurricanes could become major events with sustained winds above 111 mph.