Standard Chartered: Global Oil Demand Hit An All-Time High In August
- In a recent report, Standard Chartered concluded that demand hit an all-time high of 103.79 million barrels per day in August.
- Whereas demand growth is lower than in all other post-pandemic Augusts, it can hardly be considered weak.
- StanChart points out that traders continue to ignore the fact that non-OPEC supply has slowed more than demand so far in 2024.
Momentum in oil markets has continued to skew towards the downside over the past two weeks, with the last 10 trading days seeing front-month Brent record seven lower settlements, eight lower intraday highs and six lower intraday lows. Meanwhile, the 30-day realized annualized Brent volatility soared to an 11-month high of 39.1% at settlement on 21 October, good for a w/w increase of 3.1 ppt. December Brent declined 1.7% to trade at $$74.80 per barrel at 13.20 pm ET in Wednesday’s intraday session while WTI crude for December delivery fell by a similar margin to trade at $70.55 per barrel.
Last week, we reported that the considerable differences in supply/demand estimates by the leading energy agencies have been making it hard to gauge actual global crude supply. For instance, according to the EIA, the UAE produced just 18kb/d above target in September, while the IEA sees the overrun as a substantial 348 kb/d. However, commodity experts at Standard Chartered have reported that demand concerns remain the biggest bearish catalyst for oil markets.
StanChart notes that on 21 October, Fatih Birol, the Executive Director of the International Energy Agency (IEA), stated “This year, global demand is very weak, much weaker than previous years”, incorrectly implying that oil demand is lower than in previous years.
However, StanChart says oil demand growth, not absolute oil demand, is what has been slowing down from earlier post-pandemic years. Indeed, StanChart says global oil demand has been setting a series of new all-time highs in the current year. Read more