The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019.
Angus Mordant | Reuters
Crude oil futures fell Thursday on a weak global demand growth forecast for 2024.
The West Texas Intermediate contract for March lost 50 cents, or 0.65%, to $76.14 a barrel, while the Brent contract for April traded at $81.12 a barrel, down 48 cents, or 0.59%.
Futures settled more than 1% lower Wednesday after U.S. commercial crude stockpiles surged. WTI and global benchmark Brent are largely flat over the past week.
Crude oil demand is expected to grow by 1.2 million barrels per day this year, down nearly 50% from growth of 2.3 million bpd in 2023, according to the Paris-based International Energy Agency.
“The expansive post-pandemic growth phase in global oil demand has largely run its course,” the IEA wrote in its February oil market report Thursday.
Supply, meanwhile, is expected to exceed demand and grow by 1.7 million bpd this year driven primarily by higher production in the U.S., Brazil, Canada and Guyana.
“Given heightened geopolitical risks and low global oil inventories, a modest surplus may help contain market volatility,” the IEA said.
OPEC, on the other hand, is forecasting a much tighter oil market this year, with demand growing by 2.2 million bpd, outpacing production growth of 1.2 million bpd outside the cartel.
“OPEC and the International Energy Agency can’t seem to agree on anything,” Phil Flynn, an analyst with the Price Futures Group, wrote in a Thursday note. “Not only has a war of words broken out between these two groups, they continue to see the global energy markets from different world views.”
In the Middle East, Israel bombed Lebanon Wednesday in retaliation for rocket attacks that killed at least one person and injured seven more in northern Israel.
And talks in Cairo aimed at securing a temporary ceasefire in Gaza appear to have stalled.
