Early data indicates global oil consumption in December grew at the slowest pace in nine months, JP Morgan said in a note on Friday, reports Reuters.
The research firm, however, said despite undershooting expectations in the last month of 2023, global oil demand growth was in line with yearly expectations.
While demand in December possibly grew 1.3 million barrels a day year-on-year, demand for the whole of 2023 was estimated to have grown 1.8 million barrels a day.
US gasoline demand in the last month of 2023 is expected to come in at 8.6 million barrels a day - 100,000 barrels a day lower than what was expected two weeks ago by the New York-based firm.
In Europe, most countries reported a decline in oil demand due to continued weakness in industrial fuels, LPG and lower seasonal uptake in heating oil due to a milder winter.
China's demand shows the country saw an average of 16.4 million barrels a day in the last quarter of 2023 - 100,000 barrels a day above J.P. Morgan estimates.
Investors and analysts expect interest rate cuts in major oil-consuming regions and lower oil prices to boost the demand.
The difference between the IEA and OPEC estimates for demand growth this year stands at 1.15 million bpd in 2024 - equivalent to roughly 1 per cent of daily world oil use for oil in the year.
A Reuters survey of 30 economists and analysts forecasts Brent crude to average $84.43 a barrel and US crude to average $78.84 in 2024.
US DRILLERS CUT OIL, GAS RIGS
The oil and gas rig count, an early indicator of future output, fell by one to 621 in the week to January 5.
US energy firms this week cut the number of oil and natural gas rigs operating for the third time in four weeks, energy services firm Baker Hughes said in its closely followed report on Jan. 5.
The oil and gas rig count, an early indicator of future output, fell by one to 621 in the week to Jan. 5.
Baker Hughes said US oil rigs rose by one to 501 this week, while gas rigs fell by two to 118.
Data provider Enverus, which publishes its own rig count data, said drillers cut 15 rigs in the week ended Jan. 3, reducing the total to 657. That put the total count down 3 per cent in the last month and down 24 per cent year-over-year.
Analysts have said the rig count has declined from a post-pandemic high of 784 rigs in December 2022 due mostly to a drop in oil and gas prices.
US oil futures dropped by around 11 per cent in 2023 after gaining 7 per cent in 2022. US gas futures, meanwhile, plunged by about 44 per cent in 2023 after rising about 20 per cent in 2022.
Fourteen of the independent exploration and production companies tracked by US financial services firm TD Cowen said they planned to cut spending by around 4 per cent in 2024 versus 2023.
In 2023, 25 of the E&Ps TD Cowen tracks said they planned to boost spending by around 20 per cent versus the prior year after increasing spending about 40 per cent in 2022 and 4 per cent in 2021.
Despite lower prices, spending and rig counts, US oil and gas output was still on track to hit record highs in 2023 and 2024 as firms complete work on already drilled wells.
The total number of drilled but uncompleted (DUC) wells remaining dropped to a record low of 4,415 in November, according to federal energy data going back to December 2013.
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