Standard Chartered: Oil Demand Isn’t as Bearish as You May Think

Oil prices have been on the backfoot in the current week, pulling back from gains in recent weeks thanks to easing geopolitical fears and seemingly never-ending demand concerns. On Monday, U.S. Secretary of State Antony Blinken announced that Israeli Prime Minister Benjamin Netanyahu had accepted a cease-fire proposal to stop the war in Gaza, but on Thursday, sources close to the White House reported that such a deal is once again out of reach as Hamas is unlikely to accept the Israeli terms, which include the occupation of the Philadelphi corridor, which Israel claims has given Hamas a strategic lifeline

Crude oil futures fell significantly on Wednesday, with WTI crude falling to $72 per barrel and Brent crude falling briefly into the $75 dollar handle. Prospects of weak demand in China offset any gains from risks to supply, with government data showing that crude demand in the country fell 8% Y/Y in July.

Commodity analysts at Standard Chartered have been able to gauge crude demand on a global scale following the release of Joint Oil Data Initiative (JODI) data on 19 August. 

According to StanChart, global oil demand in the month of June clocked in at a healthy 103.01 million barrels per day (mb/d), an all-time high. Following JODI revisions, StanChart estimates that May demand came in at 102.68 mb/d, the second-highest monthly average after June. The average demand growth for the second quarter was 1.521 mb/d y/y, close to StanChart’s forecast for 2024 full-year growth (1.514 mb/d). Read more