Global oil demand growth slowing -IEA

Global oil demand growth slowed in the second quarter of the year, primarily due to softer construction and industrial activity in China, the International Energy Agency said Tuesday.

“Demand is set to rise by less than 1 mbd (million barrels per day) in both 2024 and 2025,” said the IEA in its monthly oil report.

That growth rate is far slower than last year’s 2.1 mbd increase and slower than pre-pandemic expansion.

The IEA expects global consumption to come in at 103.06 mbd in 2024, up from 102.09 mbd last year and 100.6 mbd in 2019.

Europe will be the only continent to see a drop in overall demand, with the Americas rising only marginally.

Demand will continue to expand apace in the Asia-Pacific region, including in China, according to the IEA.

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Yet the IEA noted Chinese oil demand fell in June for the third consecutive month, primarily due to weaker demand for gasoil (diesel) and naphtha, products used by the construction and manufacturing industries.

The IEA noted that the rising number of trucks running on natural gas or batteries was also eroding demand for diesel.

“Chinese oil demand growth has gone into reverse due to a slowdown in construction and manufacturing, rapidly accelerating deployment of vehicles powered by alternative fuels and comparison to a stronger post-reopening baseline,” said the Paris-based IEA, which advises oil-consuming nations on energy policy.

It noted that sales of electric cars have also been strong, citing data from the China Passenger Car Association showing that they accounted for more than 50 percent of sales in July, and are up by third for the first half of the year.