IEA lowers 2024 global oil demand forecast
September 13, 2024
Crude oil prices closed higher yesterday mainly driven by Hurricane Francine shutting down 41.7% of offshore oil production with 169 platforms evacuated according to the US Bureau of Safety and Environmental Enforcement. Also supporting prices was news Libya’s oil production remains offline roughly 900,000 bpd, with very little exports and the ongoing US recession fears.
Yesterday afternoon Bloomberg was reporting that there was no serious damage to any refineries because of Hurricane Francine. He is some updated reports I have seen this morning. Six crude oil refineries along the coast of Louisiana were in the path of Hurricane Francine and they are all in various stages of operation. Some are back to near capacity already, others are restarting, and still others appear to remain in damage assessment mode or waiting for electrical power to be restored.
Bearish for prices, the International Energy Agency in a monthly report lowered their global oil demand growth forecast by 70,000 bpd to 900,000 bpd for 2024. The IEA said their forecast was lowered due to lower demand adjustments to China. IEA kept their global oil demand growth forecast for 2025 the same as last month’s report at 950,000 bpd.
The head of commodities research at Citibank said this week…”market is trying to send a strong signal to OPEC that there’s no room for any more barrels “ in this current market. He suggested that OPEC needs to cut an extra million barrels for the entirety of 2025 to balance this market.
Traders are focusing on what the Federal Reserve will do with interest rates at their meeting next week. Most seem to think a 25-point reduction is coming but the odds for a 50-point reduction did go up overnight. The odds of that 50-point cut went from 14% to 45% overnight.