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Despite record oil demand, market dynamics remain bearish, with falling Brent prices and rising volatility.
Standard Chartered has reported that global oil demand surged to an all-time high of 103.01 million barrels per day, according to the latest Joint Oil Data Initiative (JODI) figures released on August 19. This record surpasses previous high demand levels, including May’s 102.68 million barrels per day. Year-on-year growth in June was 788,000 barrels per day, a slowdown from earlier months but still robust.
The report also noted a month-on-month increase in global oil supply to 102.097 million barrels per day, though it remains below December 2023's peak of 103.162 million barrels per day. Despite these bullish demand figures, Standard Chartered's analysts cautioned about the bearish market dynamics, citing a significant drop in Brent crude prices, which fell to $76.55 per barrel by August 20. Volatility has reached a seven-month high, adding to market instability.
The decline in prices is partly attributed to a perceived reduction in geopolitical risk premiums related to the Gaza conflict. However, the analysts remain skeptical about the impact of geopolitical developments on oil prices, suggesting that recent market behavior is driven more by shifts in trading positions rather than fundamental supply-demand changes.
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