Producer group OPEC and the International Energy Agency, the world’s most closely watched forecasters of oil demand growth, are further apart than they have been for at least 16 years in their views on fuel use, according to Reuters research.
The gap between the IEA, which represents industrialised countries, and the Organisation of the Petroleum Exporting Countries means the two are sending divergent signals to traders and investors on oil market strength in 2024 and, for the longer term, about the speed of the world’s transition to cleaner fuels.
In February this year, the IEA predicted demand will rise by 1.22 million barrels per day (bpd) in 2024, while in its February report OPEC expected 2.25 million bpd. The difference is about 1 per cent of world demand.
“The IEA has a very strong perception that the energy transition will move ahead at a much faster pace,” Neil Atkinson, a former head of the IEA’s Oil Markets Division, said. “Both agencies have boxed themselves in with a position, which is why they have this enormous gulf in demand forecasts.”
To set the difference in context, Reuters analysed the changes each agency has made to its oil demand forecasts from 2008 to 2023, and the first two months of this year.
The period was chosen to give a long enough time series to draw conclusions and because it included extreme volatility in oil demand, starting with the 2008 financial crisis and ending with the 2020 pandemic and subsequent demand recovery.