Title: Global Oil Demand Reaches Record Highs Amidst Economic Headwinds
As summer air travel resumes and Chinese petrochemical activity remains strong, global oil demand is expected to hit record highs, averaging 102.2 million barrels per day in 2021. These figures were recently released in a report by the International Energy Agency (IEA), which also highlighted increased oil usage in power generation as a contributing factor.
China, the world’s largest energy consumer, is expected to account for more than 70% of the growth in global oil demand. Despite concerns over the country’s economy, Chinese demand has exceeded expectations, reaching unprecedented levels. This robust demand from China has helped drive world oil demand to reach a record-breaking 103 million barrels per day in June, with expectations of another peak in August.
Although there have been worries about persistent economic headwinds that could potentially impact oil demand, the IEA’s estimated growth rate remains unchanged from the previous month’s report. Developed economies have experienced a rebound in demand, with overall consumption returning to growth during the second quarter. This positive trend has partly offset concerns regarding the global economic recovery.
However, the IEA has revised its estimate for global oil demand growth in 2024, projecting a slowdown to just 1 million barrels per day year over year. This cautious outlook reflects uncertainties surrounding the pace of economic recovery and potential structural changes in energy consumption patterns.
Refinery throughputs are projected to hit a summer peak of 83.9 million barrels per day in August, surpassing May’s levels and exceeding last year’s figures. Despite these increased production rates, the market remains tight, leading to near-record-high prices for gasoline and middle distillates. Additionally, high sulfur fuel oil cracks have supported profit margins, reaching levels above 2022 benchmarks in July.
Given the current global circumstances, the energy industry continues to closely monitor oil demand patterns and market dynamics. The IEA’s latest report signals both positive and cautious indicators, highlighting the impact of summer travel, Chinese petrochemical activity, and increased oil use in power generation on global oil demand. As the year progresses, it will be crucial to assess how economic factors and changing energy consumption patterns shape the future of the oil market.
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