The U.S. Energy Information Administration expects global liquid fuel production to outpace demand in 2023 and 2024.
The U.S. Energy Information Administration (EIA) expects global liquid fuel production to outpace demand in 2023 and 2024, according to its latest short term energy outlook (STEO).
In the STEO, which was released this week, the EIA projects that total world production will hit 101.47 million barrels per day this year and 103.02 million barrels per day next year. The STEO expects total world consumption to come in at 100.90 million barrels per day in 2023 and 102.69 million barrels per day in 2024.
Broken down quarterly, the latest STEO expects total world production to hit 100.73 million barrels per day in the first quarter of this year, 101.28 million barrels per day in the second quarter, 101.92 million barrels per day in the third quarter, 101.93 million barrels per day in the fourth quarter, 102.27 million barrels per day in the first quarter of 2024, 102.85 million barrels per day in the second quarter, 103.43 million barrels per day in the third quarter, and 103.53 million barrels per day in the fourth quarter.
The latest STEO anticipates that total world consumption will be 99.94 million barrels per day in the first quarter of 2023, 100.60 million barrels per day in the second quarter, 101.47 million barrels per day in the third quarter, 101.56 million barrels per day in the fourth quarter, 102.04 million barrels per day in the first quarter of next year, 102.31 million barrels per day in the second quarter, 103.25 million barrels per day in the third quarter, and 103.14 million barrels per day in the fourth quarter.
The EIA’s March STEO outlined that 2022 total world production and total world consumption was 99.86 million barrels per day and 99.42 million barrels per day, respectively. In its February STEO, which pegged total world production at 99.95 million barrels per day and total world consumption at 99.36 million barrels per day, the EIA projected that total world production would hit 101.10 million barrels per day in 2023 and 102.61 million barrels per day in 2024. Total world consumption was projected to hit 100.47 million barrels per day in 2023 and 102.26 million barrels per day in 2024 in that STEO.
“Globally, liquid fuels consumption in our forecast increases from an average of 99.4 million barrels per day in 2022 to 100.9 million barrels per day in 2023, which is 0.4 million barrels per day higher than in last month’s outlook,” the EIA said in its latest STEO.
“The higher consumption forecast is primarily driven by upward revisions to global economic growth. We expect China will account for about half of the growth in global liquid fuels consumption in 2023. Forecast consumption in China increases by 0.7 million barrels per day in 2023. We forecast consumption in India to increase by 0.2 million barrels per day and other non-OECD consumption to grow by 0.5 million barrels per day on average,” the EIA added.
“This growth in non-OECD countries counteracts almost no consumption growth among OECD countries in 2023. OECD consumption remains largely unchanged as the effects of inflation continue to limit GDP and oil demand growth. We forecast global liquids fuel consumption will grow by an additional 1.8 million barrels per day in 2024, and non-OECD countries will account for 1.6 million barrels per day of the growth,” the EIA continued.
The organization went on to note, however, that “significant uncertainty around our demand forecast remains because a wide range of possible outcomes exist for both global economic conditions this year and travel and oil demand in China following its pivot away from a zero-Covid strategy”.
In the latest STEO, the EIA said “world liquid fuels production averaged about 100 million barrels per day in 2022, and we forecast it will rise by an average of 1.6 million barrels per day in both 2023 and 2024”.
“Despite upward revisions to increasing our forecast of global liquid fuels consumption, we still expect consistent global oil inventory builds over the forecast period as global oil production continues to outpace consumption,” the EIA stated in the STEO.
In its latest oil market report, which was released in February, the International Energy Agency (IEA) stated that global oil demand is set to rise by two million barrels per day in 2023 to 101.9 million barrels per day. The IEA noted in the report that the Asia-Pacific region, fueled by a resurgent China, dominates the growth outlook.
Looking at oil supply, the IEA stated in the report it expects global output to grow 1.2 million barrels per day in 2023, “driven by non-OPEC+”.
“Supply from OPEC+ is projected to contract with Russia pressured by sanctions,” the IEA said.
