Global oil demand has surpassed that of 2019 and is expected to continue to grow
SINGAPORE: Global oil markets are expected to be balanced, with a slight surplus next year, as demand and expansion from non-OPEC sources exceed expectations, Vitol’s global head of research, the largest independent oil trader in the world.
Global oil demand has surpassed 2019 degrees and is expected to continue growing as oil intensity (the volume of oil fed per unit of GDP) for major economies has returned to pre-pandemic levels in the United States, Giovanni Serio said. at FT Commodities. Asian Summit.
On the other hand, supply will have to be limited due to further cuts by primary manufacturers such as Saudi Arabia, he said, despite weak investment in recent years. Non-OPEC production expansion has also surpassed previous peaks and continues to grow, while Nigeria’s output surprised to the upside, he added.
“Demand is 2. 3 million barrels per day more than in 2019 and the Saudis want to give a lollipop that generates nine million barrels per day to balance the market,” Serio said.
He added that demand has exceeded expectations and the source will have to be limited to a point that is only slightly higher than the Saudi production point after the COVID-19 crisis.
The global price of Brent crude weakened to just over $82 a barrel, from a 2023 high in September near $98. Concerns about economic expansion and demand have put pressure on prices, despite cuts coming from OPEC and its allies and the shock in the Middle East.
The International Energy Agency (IEA) on Tuesday raised its forecast for oil expansion this year and next, despite slowing economic expansion in almost all primary economies.
The refining sector is “experiencing one last push of expansion” and could see an era of slowdown next year, but capacity could shrink again in 2028-2035 amid low investment, Serio said.
As for refined fuels, Serio said it is inappropriate to say that gas demand in China has peaked, as sales of gas-powered cars remain at solid levels.
“If you look at the expansion of their fleet of gasoline cars, we’re still expecting 11 million more cars, a net addition next year. And this year, 12 million cars, new cars in China, that is, gas cars and a net addition to their fleet,” Serio said.
At the same time, demand for refueling, or marine fuel, is stagnating due to increased shipping power and the increasing use of alternative fuels, he added.
Serio expects jet fuel demand to return to pre-COVID-19 levels next year, adding that fuel demand is expected to peak until 2040 because it is too difficult to decarbonize the sector. (Reporting via Muyu Xu and Trixie Yap; written through Florence Tan; editing via Christian Schmollinger and Edwina Gibbs)
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