LONDON (Reuters) - The International Energy Agency (IEA) has indicated that the gradual stabilization following the turbulence of the post-pandemic era, coupled with an uncertain economic climate, is expected to temper demand growth within the current year.
Despite temporary boosts from disruptions in shipping, the overall trajectory is seen returning to a more predictable pattern.
In its latest monthly oil report, the IEA, headquartered in Paris, highlighted a shift back towards historical norms in growth following the volatile years of the pandemic.
Factors such as a global economic slowdown, advancements in vehicle efficiencies, and the expansion of electric vehicle fleets are contributing to this moderation in oil consumption.
Projections by the IEA suggest a growth rate of 1.3 million barrels per day (bpd) for this year, marking a decline of one million bpd from 2023.
However, this forecast has been revised slightly upward by 110,000 bpd compared to the previous month, mainly due to disruptions caused by Houthi attacks in the Red Sea, which have extended supply routes.
While central banks are signaling accommodative policies to navigate out of economic stagnation, concerns persist regarding subdued economic data from China, as noted by the IEA.
It's important to note that the IEA's growth forecast is notably more conservative than that of OPEC, which maintains a more optimistic outlook on economic prospects, with a variance of almost 1 million bpd.
(Correction: The headline should refer to demand growth, not supply.)
(Reporting by Noah Browning; editing by Jason Neely)