In a research note sent to Rigzone on Thursday by the JPM Commodities Research team, analysts at J.P. Morgan said they “do not foresee a peak in oil demand through 2035”.
“Today, the world consumes 102.7 million barrels of oil daily, and building on our 2022 analysis, we do not foresee a peak in oil demand through 2035,” the analysts stated in the research note.
“We project global oil consumption to increase by 7.1 million barrels per day between 2023 and 2035, or roughly seven percent, reaching 108.5 million barrels per day by 2035,” they added.
“Yet, evidence is emerging that global fuel habits are shifting. Without decarbonization initiatives, we estimate that global oil demand would have likely averaged 103.5 million barrels per day today and 116 million barrels per day by 2035,” they continued.
In a separate research note sent to Rigzone later the same day by the JPM Commodities Research team, analysts at J.P. Morgan stated that, through October 17 month to date, global oil demand averaged 103.2 million barrels per day.
The analysts highlighted in the note that this figure marked a “2.0 million barrel per day year on year increase from the same period last year” and surpassed their estimates “by 100,000 barrels per day”.
“This rebound follows the resolution of weather related disruptions, with activity returning to normal,” they added.
“Year to date, demand has risen by 1.2 million barrels per day compared to our November 2023 forecast of a 1.5 million barrel per day increase,” they continued.
The analysts stated in the note that global observable oil inventories declined by 10.5 million barrels in the second week of October.
“This was primarily driven by a seven million barrel reduction in oil product inventories, with visible crude stocks also decreasing by 3.5 million barrels,” they added.
“Although the U.S. and China saw a combined draw of 25 million barrels in observable oil inventories during the week, commercial crude oil builds in other regions helped mitigate the overall decline,” they continued.
The analysts went on to note that “reported visible OECD commercial oil stocks (including the U.S., Europe, Japan, and Singapore) experienced a nine million barrel draw over the same period”.
“These stocks saw an even reduction between crude and oil products, marking their fourth consecutive weekly draw. While the U.S. led with a seven million barrel net draw, Europe was the only region to report a net build during the week,” they added.
In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) projects that global consumption will average 103.06 million barrels per day in 2024 and 104.35 million barrels per day in 2025.
“We forecast that global consumption of liquid fuels will increase by 0.9 million barrels per day in 2024 and 1.3 million barrels per day in 2025,” the EIA said in its latest STEO.
“Our 2024 forecast is down from last month due to downward revisions to demand in China and our 2025 forecast is down primarily because of downward revisions to demand in OECD countries,” it added.
In its latest STEO, the EIA said it reduced its forecast for China’s liquid fuels consumption in 2024 because of continued declines in the country’s crude oil imports and refinery runs in 3Q24.
“Although the Chinese government recently announced monetary stimulus measures that could result in higher economic growth and petroleum consumption in 2025, we have kept our forecast 2025 growth rate largely unchanged,” the EIA stated.
“We forecast China’s petroleum and liquid fuels consumption will grow by about 0.1 million barrels per day in 2024 and 0.3 million barrels per day in 2025,” it added.
“We reduced our forecast of total OECD oil consumption by 0.2 million barrels per day in 2025 compared with last month’s STEO as a result of weaker expectations for industrial production and manufacturing growth in the United States and Canada,” it continued.
The EIA noted in its October STEO that most of its expected global liquid fuels demand growth is from non-OECD countries “where liquid fuels consumption increases by 1.0 million barrels per day in 2024 and 1.2 million barrels per day in 2025, in contrast to consumption in OECD countries, which falls by 0.1 million barrels per day in 2024 before increasing by a similar amount in 2025”.
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