Global oil demand growth to slow in 2024: Emirates NBD

Global oil demand growth to slow in 2024: Emirates NBD

Global oil demand growth will slow in 2024 as overall economic activity cools, says Emirates NBD Research. The absence of a strong demand story like the return of China from Covid-19 will limit upside risk to demand, writes Edward Bell, Head of Market Economics, Emirates NBD Research.

Supply from outside of the Opec+ alliance will expand by more than 1 mbpd in 2024, led by North and South American production.

Several Opec+ members will extend voluntary cuts into Q1 though compliance will be critical in order to avoid overwhelming oil markets. Production will only be able to tentatively return to markets over the rest of 2024.

Prices to linger

Oil prices will linger in a sluggish global economy with Brent to average $82.50/b. Downside risks stem from worse than expected demand or a potential breakdown of the Opec+ alliance of producers.

The global economy looks set to tread water in 2024 as recovery in China cools and developed economies contend with the effects of high interest rates. The IMF’s projections for 2024 have global output easing to 2.9%, down from 3% in 2023 and 3.5% in 2022. The US economy is set to cool sharply as the Federal Reserve navigates its way to a soft-landing