Standard Chartered Forecasts Robust Oil Demand in 2024 and 2025

by | Jan 15, 2024 | Energy, China, India, Oil Prices, Production, Resiliency, United States

Offering valuable information for industry stakeholders, policymakers, and investors alike.

The Future of Oil Demand: A Standard Chartered Forecast for 2024-2025

Introduction

Standard Chartered, a globally recognized financial institution, has recently unveiled its comprehensive predictions for the global oil demand for 2024 and 2025. This forecast provides pivotal insights into the evolving dynamics of the energy sector, offering valuable information for industry stakeholders, policymakers, and investors alike.

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Oil Demand Forecasts: What Standard Chartered Predicts

According to Standard Chartered’s analysis, the global oil demand is poised for robust growth, projecting an increase of 1.54 million barrels per day (mb/d) in 2024 and a further 1.41 mb/d in 2025. These projections indicate a trajectory that surpasses the longer-term average, signaling the resilience and adaptability of the oil market amidst various economic and geopolitical challenges.

Significant Milestones: A Rise in Monthly Demand

Standard Chartered’s forecast also highlights significant milestones in the global oil market. The institution anticipates that the global monthly demand will exceed 104 million barrels per day by August 2024, subsequently surging to 105 million barrels per day by August 2025. These milestones underscore the burgeoning demand for oil, particularly during these specific periods, driven by various factors such as economic growth, industrial activities, and transportation needs.

Leading Players: China and India’s Role in Demand Growth

China and India, as dominant players in the global energy landscape, are poised to play pivotal roles in shaping oil demand growth. Standard Chartered predicts that China, the world’s largest oil importer, will lead the demand surge with an increase of 553,000 barrels per day in 2024 and 373,000 barrels per day in 2025. Similarly, India’s demand growth is forecasted to escalate by 329 kb/d in 2024 and 373 kb/d in 2025. These projections illuminate the indispensable roles that these emerging economies play in driving global oil consumption.

Implications for Energy Industry Investors

The forecasts provided by Standard Chartered carry profound implications for investors in the energy sector. The anticipated surge in oil demand, especially from burgeoning markets like China and India, underscores lucrative investment opportunities in oil-related assets. Investors are advised to explore energy stocks exhibiting robust balance sheets, resilient cash flows, and a consistent dividend history. Additionally, given the anticipated volatility in oil prices, short-term traders may consider leveraging funds like DBO and PXJ to capitalize on energy commodity futures effectively.

U.S. Oil Production: A Slowing Growth Trajectory

In contrast to the global trend, U.S. oil production growth is expected to decelerate in the coming years. Standard Chartered’s projections indicate a transition from 1.009 mb/d in 2023 to 464 kb/d in 2024, further plummeting to 137 kb/d in 2025. However, it’s crucial to acknowledge that the prevailing drilling and capex strategies adopted by U.S. producers could potentially influence these forecasts, leading to variations in actual production levels.

Wall Street’s Perspective: Bullish Outlook for 2024

Despite the inherent uncertainties and fluctuations in the oil markets, Wall Street remains cautiously optimistic about 2024, heralding it as ‘the year of the pivot.’ The Federal Reserve’s indications of potential rate cuts, coupled with evolving supply-demand dynamics in global oil markets, further solidify this bullish sentiment among investors, fostering a conducive environment for strategic investments in the energy sector.

Conclusion

In conclusion, Standard Chartered’s comprehensive oil demand forecasts for 2024-2025 offer invaluable insights and guidance for energy industry stakeholders and investors. With the anticipated growth in global oil demand, particularly fueled by dominant markets like China and India, it is imperative for investors to remain vigilant, informed, and proactive in exploring potential opportunities within the evolving energy landscape. By leveraging expert insights and adopting a strategic approach, investors can navigate the complexities of the energy sector and capitalize on emerging trends, ensuring sustainable growth and profitability in the long run.

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