By India has emerged as the leading source of growth in global oil consumption, the US Energy Information Administration (EIA) said on late Wednesday.
Over 2024 and 2025, India accounts for 25% total oil demand growth globally, the EIA said in its November Short Term Energy Outlook.
“We expect an increase of 1.0 million barrels per day in global consumption of liquid fuels in 2024,” the agency said.
Next year, global oil consumption is likely to rise by a further 1.2 million barrels per day, it said in the report.
Global oil consumption
The US energy agency said that the growth in global oil demand projected for both 2024 and 2025 will be below the pre-pandemic 10-year average of 1.5 million barrels per day of annual growth.
The projected growth for this year and the next will also be lower than what was seen in the pandemic recovery period between 2021 and 2023.
Most of the growth is seen from countries outside the Organization for Economic Cooperation and Development alliance.
In India, oil demand is likely to increase by 300,000 barrels per day in both 2024 and 2025, the EIA said. This will be driven by rising demand for transportation fuels.
“We forecast China’s petroleum and liquid fuels consumption will grow by less than 0.1 million b/d in 2024 before recovering to almost 0.3 million b/d 2025,” the agency said.
In China, rapidly expanding electric vehicle ownership, rising use of liquefied natural gas for trucking goods, and decelerating economic growth have limited consumption growth for transportation fuels.
Production
The EIA raised its forecast for oil production for both 2024 and 2025.
It expects global oil production to average 102.62 million barrels per day in 2024 slightly higher from its previous estimate of 102.50 million barrels per day.
For 2025, production is expected at 104.66 million barrels per day against 104.54 million barrels per day estimated last month.
Similarly, the agency has raised its estimate for US production as well.
EIA expects US’ oil production to average 13.23 million barrels per day in 2024. This is slightly higher than 13.22 million barrels per day estimated in October’s report.
US’ oil production is expected to be at record levels as 2024’s estimate is about 300,000 barrels per day higher than 2023’s record levels.
Oil prices and inventories
Despite lower crude oil prices recently, EIA expects the ongoing withdrawals from global oil inventories and heightened Middle East tensions to put upward pressure on prices in January-March 2025.
We estimate that global oil inventories fell by 0.9 million barrels per day (b/d) in 3Q24, and we estimate they will fall by an average of 0.3 million b/d in 4Q24 and 1Q25.
“As a result, we expect the Brent price will rise from $72/b on November 11 to an average of $78/b in 1Q25,” the agency added.
Further, the agency expects production from the Organization of the Petroleum Exporting Countries and allies to increase during April-June of 2025 along with non-OPEC supply.
This is expected to outweigh global oil demand growth as inventories will rise by an average of 400,000 barrels per day during April-June. In the second half of 2025, inventories are expected to rise by an average of 600,000 barrels a day.
“We forecast that inventory builds will put downward pressure on crude oil prices, with Brent falling to an average of $74/b in 2H25. In our forecast, the Brent price averages $76/b for the full year of 2025,” the agency said.
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