International Energy Agency raises oil demand growth outlook again

The International Energy Agency (IEA) has again raised its forecast for growth in global oil demand this year. It cited stronger economic growth and lower oil prices in the fourth quarter of last year. The organization said so today in its regular monthly report on market conditions.

Oil consumption is now expected to rise by 1.24 million barrels per day this year, 180,000 barrels more than the agency forecast previously. Growth in China’s petrochemical sector will account for much of the increase.

„The economic outlook has improved somewhat in recent months, mainly as a result of central banks’ recent easing of monetary policy,“ the IEA said.

„Another encouraging factor is the sharp drop in oil prices in the fourth quarter of last year,“ it added.

The IEA has raised its outlook for this year for the third consecutive time, although its estimate remains below that of the Organization of the Petroleum Exporting Countries (OPEC). The oil cartel expects demand to increase by 2.25 million barrels per day this year.

The increase projected by the IEA is half the size of last year’s, when demand grew by 2.3 million barrels per day. This was due to the post-COVID-19 recovery nearing its end, subdued economic growth in major economies, and the impact of improving energy efficiency.