The International Energy Agency (IEA) recently released a report highlighting a significant deceleration in global oil demand growth. This slowdown is attributed mainly to a contraction in Chinese consumption, driven by the country’s ongoing economic challenges.

The discrepancy in oil demand forecasts between the IEA and the Organization of the Petroleum Exporting Countries (OPEC) is stark. While the IEA has maintained a relatively conservative forecast of 970,000 bpd growth for this year, OPEC remains much more optimistic. OPEC predicts that oil demand will rise by 2.25 million bpd this year, with China contributing a significant portion of this growth.

This divergence in forecasts stems partly from differing views on the pace of the global transition to cleaner fuels.

On the supply side, the IEA projects that oil supply growth will reach 770,000 bpd this year, bringing total supply to a record 103 million bpd.

Despite the fact that seeing the global picture provides few advantages when making trading decisions with a close planning horizon, shifts in global forecasts may suggest the moment of a change in trend or a possible increase in price volatility.