Oil demand is set to hit a record high this year and the market is tightening but economic headwinds and interest rate hikes have deflated growth expectations slightly, the International Energy Agency (IEA) said on Thursday.
Still, the Paris-based energy watchdog sees demand growth next year rising by more than anticipated despite the rise being less than half that of this year.
“World oil demand is coming under pressure from the challenging economic environment, not least because of the dramatic tightening of monetary policy in many advanced and developing countries,” the IEA said in its monthly oil report.
While demand is expected to reach 102.1 million barrels per day (bpd), the Paris-based energy watchdog lowered its forecast for growth of the first time this year, by 220,000 barrels per day (bpd), to 2.2 million bpd.
The oil market is tightening, the IEA projected, with demand set to outstrip supply for the rest of 2023.
China is due to make up more than two-thirds of this year’s demand growth as its post-pandemic economic rebound is set to gain pace, especially later in the year, the IEA said.
Its recovery has gotten off to a slow start so far, however.
“China’s widely anticipated reopening has so far failed to extend beyond travel and services, with its economic recovery losing steam after the bounce earlier in the year,” the IEA said.
Demand in developed countries and especially Europe remains subdued as manufacturing slumps, with OECD developed countries on the continent due to register four consecutive quarters of contracting demand up to the final quarter of 2023.
Oil demand growth is set to halve next year to 1.1 million bpd, the IEA said, reflecting vehicle electrification and energy efficiency, though it raised its view from a 860,000 bpd rise it forecast last month.
A more robust global economic outlook next year and an expected increase in gasoil use in China accounted for the raised forecast, it said.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
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