Bankinter | OPEC projects weaker oil demand for 2024 and 2025 in its monthly report. It estimates that it will grow in 2024 +1.99% year-on-year (versus +2.07% previously) or 2.03M bpd (versus 2.11M bpd previously) and in 2025 +1.67% (versus +1.71% previously) or 1.64M bpd (versus 1.74M bpd previously). This is the second consecutive month of downward revisions to global oil demand.
Opinion of the Bankinter analysis team: Bad news for oil prices, which yesterday recorded the lowest level since December 2021: Brent $69.19/barrel (-3.7%). Among the estimates, the downgrade in China’s oil demand stands out. It estimates that by 2024 it will grow +3.99% year-on-year (versus +4.25% previously) or 650,000 bpd (versus 700,000 bpd previously).
The report notes that “growth expectations in China are well supported and that the downgrade is explained by the increased penetration of electric vehicles”. However, in our opinion, the macroeconomic scenario the country is facing is not encouraging (sluggish domestic demand, weak real estate market, non-existent inflation, etc.).
In conclusion, (i) falling oil prices and (ii) positive for inflation, especially in Europe, which facilitates the ECB’s work. And (iii) new signs of the difficulties facing the Chinese economy. For the latter reason, and as explained in our Q3 2024 Investment Strategy, we are still not considering China as an investment idea as the risk/return trade-off remains unattractive.
