BAKU, Azerbaijan, January 19. BMI, a Fitch Solutions company, anticipates a robust 1.8 percent year-over-year (y-o-y) growth in gasoline supply for the year 2024, marking a substantial acceleration from the 0.4 percent y-o-y growth observed in 2023, Trend reports.
Projections indicate that Brent prices are poised to average $85.0/bbl in 2024, surpassing the 2023 level of $82.2/bbl. This upward trajectory remains a key bullish factor influencing gasoline prices. The forecast for 2024 is substantiated by ongoing supply cuts implemented by the OPEC+ group, coupled with the anticipated broader economic recovery in the latter half of 2024, which is expected to bolster prices. Despite the rise in Brent prices, BMI suggests that the impact on gasoline prices will be offset by a notable decrease in gasoline crack spreads.
BMI's outlook foresees gasoline crack spreads settling at $13.5/bbl in 2024, experiencing a decline from the record levels of $25.7/bbl in 2022 and $23.3/bbl in 2023. This decline is attributed to a shifting market balance, with gasoline production growth outpacing demand growth.
The forecast also points towards a deceleration in global real GDP growth, expected to decrease from 2.6 percent in 2023 to 2.1 percent in 2024, which will impact gasoline demand growth. BMI predicts a reduction in gasoline demand growth from 2 percent y-o-y in 2023 to 1.3 percent y-o-y in 2024 due to the broader economic slowdown. Notably, countries such as Nigeria and Argentina are expected to experience a decline in gasoline consumption in 2024, primarily due to fuel subsidy removal. The United States, the world's largest gasoline consumer, is also anticipated to witness weakening demand growth, with real GDP growth slowing from 2.5 percent y-o-y in 2023 to 1.4 percent y-o-y in 2024.
China stands out as a positive story for gasoline demand, with BMI expecting demand growth to accelerate in 2024, resulting in surplus demand reaching 138,000 b/d. However, despite this positive outlook for China, the overall change in gasoline demand is projected to settle at 336,000 b/d in 2024, a decrease from the 487,000 b/d recorded in 2023.
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