Oil Demand Averages Over 103MM Barrels Per Day in July

Global oil demand averaged 103.6 million barrels per day month-to-date through July 6.

That’s what J.P. Morgan analysts stated in a research note sent to Rigzone by the JPM Commodities Research team late Wednesday. Consumption rose by 1.7 million barrels per day over year-ago levels and in line with J.P. Morgan’s published estimates, the note outlined.

“Year to date, global oil demand continues to track a 1.33 million barrel per day growth compared with our November projections of a 1.6 million barrel per day ga​in,” the analysts said in the note.

“However, some of the high-frequency indicators available after July 6 indicate a further advance in oil consumption, adding tailwinds to our July demand projections,” they added.

“We believe a rebound in U.S. and Chinese air travel activity, and a weather-related increase in fuel oil and gasoil use in the Middle East, are driving these gains,” they continued.

In the note, J.P. Morgan analysts highlighted that U.S. gasoline demand averaged 9.4 million barrels per day for two consecutive weeks, “rising to the highest level in over a year on a four-week average basis”. The analysts also pointed out that U.S. jet fuel demand rose to a post-pandemic high of 1.8 million barrels per day on a four-week average basis.

Global observable oil inventories (crude and products) drew by four million barrels per day in the first week of July, with an eight million barrel per day draw in crude somewhat offset by a four million barrel per day build in products, the analysts stated in the note.

“Within the crude draw, the U.S. and China were responsible for a combined 19 million barrel draw in the first week of July,” they added.

Looking at June, the analysts outlined in the note that global observable oil inventories built by 11 million barrels against their expectations of a 34 million barrel draw, “largely driven by Chinese re-stocking of 26 million barrels”. 

In a separate note sent to Rigzone by the JPM Commodities Research team on June 26, analysts at J.P. Morgan said their tracking of global oil demand softened by 80,000 barrels per day for the month of June, through June 25, but highlighted that this figure was “still averaging 1.4 million barrel per day year over year growth”.

“The pullback in demand was mostly centered in Mexico and Texas, where tropical storm Alberto caused widespread coastal flooding along the Gulf Coast, limiting travel,” the analysts said in that note.

“Year to date, global oil demand continues to track a 1.4 million barrel per day growth compared to our November projections of 1.57 million barrel per day gain,” they added.

“The hurricane left a noticeable mark on U.S. gasoline consumption, which came in below the nine million barrels per day mark last week for the first time in three weeks,” they continued.

“Travel activity has recovered strongly since then, reflected in a record daily air passenger traffic, with the average passenger volume for the current week already 2.3 percent above the previous week’s numbers,” they went on to state.

In its latest short term energy outlook (STEO), which was published earlier this week, the U.S. Energy Information Administration (EIA) projected that global petroleum and other liquid fuels consumption would come in at 102.91 million barrels per day in 2024 and 104.68 million barrels per day in 2025. This figure averaged 101.80 million barrels per day in 2023, according to the STEO.

In its previous STEO, the EIA projected that global petroleum and other liquid fuels demand would average 102.98 million barrels per day in 2024 and 104.51 million barrels per day in 2025. In that STEO, the EIA revealed that this figure averaged 101.90 million barrels per day in 2023.

“We forecast that global consumption of liquid fuels will increase by 1.1 million barrels per day in 2024 and 1.8 million barrels per day in 2025,” the EIA said in its latest STEO.

“Most of the expected demand growth is from non-OECD countries. In 2024, consumption of liquid fuels by non-OECD countries increases by 1.2 million barrels per day, offsetting a small decline in OECD, particularly in Europe and Japan,” it added.

“In 2025, non-OECD consumption rises by 1.4 million barrels per day, mostly in China, where we expect consumption will increase by 0.4 million barrels per day, and India, with a 0.3 million barrel per day increase,” it continued.

“We expect OECD consumption rises by 0.4 million barrels per day, led by consumption growth in the United States,” the EIA went on to state.

To contact the author, email andreas.exarheas@rigzone.com