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In a report sent to Rigzone this week, analysts at Standard Chartered noted that they expect oil demand growth to slow in China in 2024 and speed up in India.
“We expect China’s oil product demand growth will slow to 516,000 barrels per day in 2024 from 819,000 barrels per day in 2023, the result of a fall in GDP growth to 4.8 percent in 2024 (from 5.4 percent to 2023) and some unfavorable base effects in key sectors including petrochemicals (following very favorable base effects in 2023),” the analysts stated in the report.
“We forecast India’s demand growth will increase to 331,000 barrels per day in 2024 from 268,000 barrels per day in 2023, helped by favorable base effects and only a slight slowing in GDP growth (6.0 percent in 2024 from 6.1 percent in 2023),” they added.
In the report, the analysts highlighted that a comparison with the main agencies (International Energy Agency (IEA), U.S. Energy Information Administration (EIA), and OPEC) shows Standard Chartered’s China forecast is within their range. The company’s India forecast, however, is above consensus, the analysts pointed out in the report.
“We think many oil traders are misreading the slowing in Asia-Pacific oil demand as being symptomatic of a severe economic malaise or a sign of peak demand, when it is just a normalization of demand growth at a robust rate comparable with pre-pandemic performance,” the analysts said in the report.
The Asia-Pacific region accounts for 79 percent of global oil demand growth over the past 10 years, the Standard Chartered analysts revealed in the report, adding that “China alone accounts for 58 percent and India a further 18 percent over this period”.
“While macro-led investors tend to concentrate on U.S. economic expectations as a proxy for oil demand, the U.S. share of global oil demand growth over the past 10 years is just 12 percent,” the analysts stated in the report.
“We think the U.S. will be less important for oil demand growth dynamics in 2024. We expect its share will be three percent, down from five percent in 2023 and seven percent in 2022,” they added.
“We forecast Asia-Pacific oil demand will grow by 952,000 barrels per day in 2024, slower than 2023’s 1.257 million barrels per day growth but close to the average for the five years before the pandemic (949,000 barrels per day),” they continued.
According to the Energy Institute’s (EI) first, and the overall 72nd, statistical review of world energy, which was released earlier this year, China’s total liquids consumption in 2022 was 14.370 million barrels per day. This figure represented a four percent drop year on year and 14.3 percent of total liquids consumption in 2022, the review highlighted. From 2012 to 2022, China’s total liquids consumption has grown 3.6 percent annually, the review outlined.
India’s total liquids consumption last year stood at 5.288 million barrels per day, according to the review, which revealed that this figure represented an 8.2 percent year on year rise and 5.3 percent of global liquids consumption in 2022. From 2012 to 2022, India’s total liquids consumption has also grown 3.6 percent annually, the review revealed.
The U.S. had the highest total liquids consumption figure last year at 20.280 million barrels per day, which represented a two percent year on year rise and 20.2 percent of global liquids consumption in 2022, EI’s review outlined. From 2012 to 2022, the country’s total liquids consumption has grown 0.9 percent annually, according to the review.
The EI review analyzes data on world energy markets from the prior year. Back in February, BP and EI announced in a joint statement that the new “custodian” of the Statistical Review of World Energy would be EI.
To contact the author, email andreas.exarheas@rigzone.com
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