(Comprehensive Report) The International Energy Agency (IEA), headquartered in Paris, France, lowered its forecast for global oil demand growth in 2024 in its latest monthly oil market report. This news has exacerbated market concerns that weak economic growth and the acceleration of the energy transition might curb fossil fuel consumption, putting downward pressure on international oil prices. 

Key information points: 

Downward revision of demand growth forecast: The IEA has lowered its forecast for global oil demand growth in 2024 by approximately 150,000 barrels per day. Currently, it expects an annual growth of around 1.1 million barrels per day. This is the second consecutive time that the IEA has lowered its growth forecast since the beginning of this year. The report indicates that the main reason is the weak performance of oil consumption data in developed industrial countries, especially in Europe. 

In stark contrast to the views of OPEC+: The pessimistic forecast of the IEA is in sharp contrast to the optimistic stance of the Organization of the Petroleum Exporting Countries and its allies (OPEC+). In its recent report, OPEC insisted that global oil demand would maintain strong growth in 2024, with an expected increase of 2.25 million barrels per day. The gap between the predictions of these two authoritative institutions is as high as over 1 million barrels per day, triggering widespread debate in the market about the future trajectory. 

Market Impact and Oil Price Response: Influenced by the IEA report, international oil prices dropped immediately on the day of its release. As of the time of this writing, the Brent crude oil futures price is hovering around $82 per barrel, while the US West Texas Intermediate (WTI) crude oil futures price is fluctuating around $78 per barrel. Market analysts point out that in addition to the uncertain demand outlook, the increase in US crude oil inventories and the expectation that "the high-interest-rate environment will persist for longer" have all contributed to the suppression of oil prices. 

Analysis of the underlying reasons: 

Economic factors: The major economies around the world, especially in Europe, have yet to fully recover from the high inflation and energy crisis. Industrial activities have been recovering slowly, which has reduced the demand for oil. 

Energy transition effect: The widespread adoption of electric vehicles, improvements in energy efficiency, and the rapid development of renewable energy are gradually and slowly eroding the long-term growth base of oil demand. The IEA report specifically mentioned that "in the power industry and the transportation sector, oil is gradually losing its market share." 

Geopolitics and Supply Side: Despite the weak demand, the ongoing production cut agreement by OPEC+ and the geopolitical tensions in the Middle East have provided a certain bottom support for oil prices, preventing them from experiencing a more significant decline.

Expert opinion in the industry: 

Bearish view: Some market traders and analysts agree with the IEA's assessment, believing that in the context of macroeconomic headwinds and the energy transition, the golden age of oil demand has already passed, and future growth will be extremely slow or even peak. 

Side view: The other side, however, supports the view of OPEC+ and believes that the demand for air travel and petrochemical raw materials in emerging economies (such as China and India) is still recovering strongly, which is sufficient to offset the weakness in developed countries and regards the current lack of demand as a short-term phenomenon. 

Future Outlook: 

The future trend of oil prices will depend on the balance between the "weak demand" and the "tight supply" forces. The market is closely watching the OPEC+ ministerial meeting scheduled for early June to see if the organization will decide to extend the voluntary production cuts until the second half of the year in order to support oil prices.