AFRICA: Road transport, aviation drive demand for global liquid — Report
By Eyo Nsima
African Energy Chamber, Organisers of African Energy Week, yesterday, disclosed that road transport and aviation have combined to drive the demand for global liquid in the past 18 months.
In its report – The State of African Energy 2024 Outlook Report – obtained by The Daily, AEC, noted that, “Asia, mainly China, and the US drive over 60% of the global road transport + aviation led products demand over second half of 2023 and full year 2024.”
It stated: “Industrial demand, mainly petrochemical industry driven, is expected to be the second key market driver for global demand over the period. Region-wise, the pet-chem sector in the Middle East alongside Asia and the US is expected to be the largest globally in terms of drawing liquids demand.
“Significant demand is also likely to be driven by energy generation initiatives like power. Despite the subdued economic activity in China and Europe over the second quarter in 2023, the demand did not see a severe dip. Over the second half of 2023, easing macroeconomic pressures, such as the tightening of US monetary policy, should encourage a more optimistic market outlook.
“The start of summer in the Northern Hemisphere has sparked a surge in crude oil demand, driven by record-breaking temperatures and increased travel, particularly impacting consumption of road and, notably, aviation fuels.”
It also stated: “Meanwhile, Saudi Arabia has extended its voluntary 1 million bpd cuts into August. Potential for further extensions to help balance the forthcoming market deficits cannot be ruled out. Alongside this, a decrease in Russian exports is being observed since April 2023 due to intensified local refinery activity, despite considerable reductions in government subsidies.
“Looking ahead, average product demand over Q3–2023 is expected to increase to over 103.3 million bpd, while supply is predicted at close to 101 million bpd. This disparity would cause a significant 2.44 million bpd deficit in this period. Q4–2023 is expected to be a less intense quarter, with demand estimated at 103.6 million bpd and supply expected to rise to 101.7 million bpd, leading to a relatively lesser deficit of 1.88 million bpd, which would cause substantial stock draws by the end of the year.
“Regionally, North America’s summer refinery season is set to peak in August with an output of 19.5 million bpd, primarily driven by robust US demand and strong refinery margins. This would result in a modest net export margin of 200 thousand bpd in August, recovering to 1.4 million bpd in Q4–2023.
“Simultaneously, Saudi Arabia’s cutbacks will reduce the Middle East’s total net surplus to 16.5 million bpd in Q3, with declining Russian exports adding more strain, particularly on the APAC market, which is projected to experience deficits of 24.7 million bpd in Q3–2023, escalating to 25.4 million in the final quarter.”
https://thedaily-ng.com/wp-content/uploads/2023/11/The-State-of-African-Energy-2024-Outlook-Report3.pdf
