IEA and OPEC Outlooks on Oil Demand
The International Energy Agency (IEA) expects the oil market to be well-supplied next year, despite a slight upward revision in its demand forecast. In contrast, the Organization of Petroleum Exporting Countries (OPEC) cut its demand growth prediction for 2024 for the fifth straight month, marking its largest reduction yet.
Analyst Insights on Market Conditions
UBS commodities analyst Giovanni Staunovo noted that the IEA anticipates a significantly oversupplied market, but this outlook has slightly diminished due to its demand revision. “The market is awaiting more news on global fiscal measures, and I don’t expect major price changes soon,” he added.
Inflation and Interest Rate Expectations in the U.S.
Inflation in the United States has risen slightly, aligning with economists’ expectations. Investors are anticipating another interest rate cut from the Federal Reserve, which is sparking optimism about economic growth and energy demand. Bjarne Schieldrop, chief commodities analyst at SEB, commented, “The inflation report is reassuring. It could have been better, but it seems low enough for the Fed to consider reducing rates at their next meeting.”
U.S. Oil Inventories and Global Demand Trends
Data from the Energy Information Administration indicates that U.S. gasoline and distillate inventories rose more than expected last week. This increase stems from weak demand, particularly from China, along with growth in non-OPEC+ supply. However, investors expect a rebound in Chinese demand after Beijing announced plans for looser monetary policy in 2025, which could boost consumption.
Slower Global Oil Demand Growth
JPMorgan analysts reported that global oil demand has increased at a slower-than-expected pace this month but remains robust. Their findings noted a slight decline in jet fuel consumption worldwide affecting oil demand growth over the past week.
China’s Crude Imports Show Signs of Recovery
In November, China’s crude imports rose annually for the first time in seven months, up more than 14% compared to the previous year. The market is now waiting for signals regarding interest rate cuts from the Federal Reserve next week.
