XPEV - Oil demand to slow sharply by 2028 putting peak in sight - IEA

2023-06-14 05:59:46 ET

Global oil demand is expected to slow "almost to a halt" within five years, the International Energy Agency said in a report Wednesday, as higher prices and supply concerns will likely speed up the shift to clean energy sources and electric vehicles.

Demand will rise 6% between 2022 and 2028 to reach 105.7M barrels per day on robust demand from the petrochemical and aviation sectors, the IEA said in its medium-term oil market report. But annual demand growth is expected to shrink from 2.4 mb/d this year to just 0.4 mb/d in 2028.

Notably, the use of gasoline for vehicles is set to decline after 2026, given increased adoption of EVs and biofuels.

"The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade," IEA Executive Director Fatih Birol said.

IEA expects growth in China demand, which has seen a muted recovery after lifting COVID-19 restrictions, to slow markedly starting next year.

In a separate report , IEA said global oil demand will grow by 2.4 mb/d in 2023 to 102.3 mb/d, outpacing last year's 2.3 mb/d increase. China is expected to account for 60% of the gains.

Front-month Nymex crude ( CL1:COM ) rose 1% early on Wednesday, while August Brent crude ( CO1:COM ) was up 0.9% .

ETFs: ( USO ), ( BNO ), ( UCO ), ( SCO ), ( DBO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )

EV stocks rose before the bell: Nikola ( NKLA ) +14.9% , Li Auto +4.3% , XPeng ( XPEV ) +3% , Nio ( NIO ) +2.9% , Tesla ( TSLA ) +1.9% .

More on oil market outlook

• Will Saudi Production Cuts Be Enough To Offset Uncertain Outlook For Oil Demand?
• A Few Months Away From Potential Start Of Global Energy Crisis
• 'Watch Out!' Saudis Make Good On Supply Cut Threat
• The Oil Market Is At The Inflection Point For 2023

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