Oil markets should be ‘comfortable’ in 2024, IEA says

Prices should be moderate despite weakening demand.

Global oil markets should remain “comfortable” this year as new supplies satisfy demand and keep prices in check, according to the International Energy Agency.

World consumption will increase by 1.2 million to 1.3 million barrels a day in 2024, a “significantly weaker” pace than last year as economic growth slows in China and elsewhere, executive director Fatih Birol said. This will be easily matched by swelling production from the Americas, predominantly the US, Canada, Brazil and Guyana.

“This growth is more than enough to meet the global oil demand,” Birol told Bloomberg television from Paris on Tuesday. “So in the absence of major geopolitical turmoil or major extreme weather events, we would expect a rather comfortable oil market and moderate oil price evolution throughout 2024.”

The IEA will release its latest monthly assessment of world oil markets this year on Feb. 15.

Crude prices have held near $80 a barrel in London in recent weeks, as the relaxed supply picture offsets fears over conflict in the Middle East and production cuts by the Organization of Petroleum Exporting Countries and its partners.

OPEC+ has generally shown “good discipline” in delivering its latest output curbs, Birol said. But he cautioned against any further moves that could bolster fuel prices and rekindle inflation.

The group pledged to cut by a further 900,000 barrels a day this quarter. Saudi Arabia has said the measures can “absolutely” be prolonged and OPEC+ delegates aim to make a decision in early March.

“Inflation is a major risk for the global economy, especially in the emerging countries,” Birol said. “We all need to avoid” actions “which will fuel inflation, including higher energy prices.”

Birol reiterated the IEA’s forecast that global oil demand will hit a plateau before the end of this decade as the world shifts away from fossil fuels in order to limit climate change.

Saudi Arabia announced last week it won’t proceed with plans to expand oil production capacity over the next few years, and on Monday the kingdom’s energy minister acknowledged the decision was linked to the energy transition.

Renewable energy is becoming increasingly prevalent in power generation, and electric vehicles are “booming” around the world, Birol said. “Clean energy is moving fast — faster than people realize.”