The International Energy Agency (IEA) recently published its monthly oil market report, maintaining the forecast of global oil demand growth in 2024 at 970,000 barrels per day (bpd). The report also highlighted that global supply growth in 2025 is expected to reach 1.8 million bpd, with countries like the US, Canada, Guyana, and Brazil leading the gains. In addition, oil supply growth in 2024 is projected to hit 770,000 bpd, boosting oil supply to a record 103 million bpd.
The IEA’s report also indicated that there is a higher demand for OPEC+ crude in the third quarter of 2024, surpassing June output by 800,000 bpd. Factors such as subpar economic growth, greater efficiencies, and vehicle electrification are expected to impact oil demand in 2024 and 2025. The report highlighted that while China accounted for 70% of global demand gains in 2023, it is only expected to contribute around 40% in 2024 and 2025, with Chinese consumption contracting as the post-pandemic rebound has slowed down.
Oil demand growth in 2024 has slowed to 710,000 bpd, marking the lowest quarterly increase in over a year. The IEA has also adjusted its 2025 oil demand growth outlook, lowering it by 50,000 bpd to 980,000 bpd. At the time of writing, WTI oil is holding steady at around $81.50, which reflects the current market reaction to the IEA’s report and other factors impacting the oil market.
WTI Oil, which stands for West Texas Intermediate, is a type of Crude Oil sold on international markets and is considered high quality due to its low gravity and sulfur content. It is sourced in the United States and distributed via the Cushing hub, serving as a benchmark for the oil market. Supply and demand, global growth, political instability, and decisions made by OPEC are key drivers of the price of WTI Crude Oil. The weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) also impact the price of WTI Oil, reflecting changes in supply and demand.
OPEC plays a significant role in influencing WTI Oil prices, as the group of 13 oil-producing nations collectively decide on production quotas for member countries at meetings. When OPEC decides to lower quotas, it can tighten supply and push up oil prices. Conversely, when OPEC increases production, it can have the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, with Russia being one of the most notable members. Overall, multiple factors such as global demand, supply levels, geopolitical events, and decisions made by key players in the oil market have a significant impact on the price of WTI Oil.
