Good news about fuel oil, behind China
Last Updated on November 19, 2024 5:07 am
The International Energy Agency (IEA) has said that supply may exceed demand in the global oil market next year. This information was informed by the forecast of rapid increase in oil production in non-OPEC countries on Sunday. News from Reuters.
According to the IEA, in 2025, more than 1 million barrels of oil may be extracted per day. The main reason for this is China’s weak economy. Because China is the largest buyer of crude oil in the world. The country’s economy continued to shrink in September. In addition, the use of electric vehicles is increasing in China. As a result, the demand for fuel oil is decreasing. China’s demand was the ‘main pressure’ on global oil demand this year. Meanwhile, outside the 13 petroleum-exporting countries, the United States, Guyana, Argentina and Brazil are seeing rapid growth in oil production. The countries are on track to increase oil production by a combined 1.5 million barrels per day. Which is higher than IEA’s oil consumption growth forecast (990 thousand barrels per day).
On the other hand, the OPEC Plus countries are withdrawing from their decision to cut production by 2.2 million barrels per day. They can start the work of increasing the production quota from next January.
However, even if the OPEC Plus countries led by Saudi Arabia do not deviate from their decision, there will be an oil surplus of more than 1 million barrels per day compared to global demand in 2025. With the volatility in international markets caused by Covid, the Russia-Ukraine war and unrest in the Middle East, only a looser supply situation can restore stability.
The IEA said that Trump’s victory in the US election and his ‘do the business’ policy will change the war situation. The Russia-Ukraine war could ease and destabilize the Middle East. It will also affect the oil market.
The United States has retained its position as the world’s largest oil producer for six consecutive years. Last August, the country’s domestic production reached a daily record of 13.4 million barrels, according to the US Energy Information Administration.