Story by Andreas Exarheas| RigZone.com|In a research note sent to Rigzone late Friday, analysts at J.P. Morgan said their high-frequency demand indicators estimate that worldwide oil consumption averaged 103.4 million barrels per day through May 22.
That figure was in line with their published estimates, the analysts highlighted in the note.
“Sequential demand improved markedly in May after underperforming expectations throughout the first four months,” the analysts added.
“As we enter peak demand season next week, we project global oil liquids demand to improve by another 2.7 million barrels per day by the end of August, measured from the end of April,” they continued.
In a previous research note sent to Rigzone on May 20, analysts at J.P. Morgan revealed that their high-frequency demand indicators estimated that worldwide oil consumption averaged 103.3 million barrels per day in the first half of May. That was 90,000 barrels per day above their published estimates, the analysts highlighted in that report.
“After underperforming our projections by 400,000 barrels per day in the first four months of the year almost entirely due to warm winter, demand improved markedly in May,” the analysts noted in that report.
“Year to date, global oil demand rose by 1.7 million barrels per day compared to the same period last year, in line with our projections from last November,” they added.
In another note sent to Rigzone at the start of the month, J.P. Morgan analysts revealed that their demand indicators estimated that global oil consumption averaged 101.5 million barrels per day in April. That was 200,000 barrels per day below their published estimates, the analysts pointed out in that note.
“On a year over year basis, demand grew by 1.9 million barrels per day, below our expectations of a 2.1 million barrel per day increase,” the analysts noted in the report.
“In the first four months of the year, global oil demand rose by 1.4 million barrels per day compared to the same period last year. Our projections from last November called for a 2.0 million barrel per day improvement,” they added.
“The underperformance in the realized demand vs. our expectations during the January-March period was almost entirely due to warmer winter conditions and the resulting weaker demand for heating fuels. The 200,000 barrel per day gap in April was due to weaker U.S. gasoline consumption during the month,” the analysts went on to state.
According to the U.S. Energy Information Administration’s (EIA) latest short-term energy outlook (STEO), which was released earlier this month, world petroleum and other liquid fuels consumption is expected to average 102.41 million barrels per day in the second quarter of this year and 102.84 million barrels per day overall in 2024.
The report showed that it averaged 102.11 million barrels per day in the first quarter of 2024 and 101.92 million barrels per day overall in 2023.
In its previous STEO released in April, the EIA forecast that international petroleum and other liquids consumption would average 102.73 in the second quarter of 2024 and 102.91 million barrels per day overall this year.
That STEO put first quarter 2024 consumption at 102.06 million barrels per day and overall 2023 consumption at 101.96 million barrels per day.
In its research notes, J.P. Morgan states that its global demand tracker calculates implied demand formulated as – daily total oil products demand equals total refinery output plus biofuels blending plus daily net imports of products plus daily change in product stocks. Total refinery output is computed as – daily crude runs times product yield plus NGLs times product yields, J.P. Morgan adds.
The company states in its notes that refinery runs and outages are sourced from IIR, product yields are sourced from Wood Mackenzie, trade flows from Kpler, biofuels from Rystad, and product stocks from Platts.
To contact the author, email andreas.exarheas@rigzone.com
