Saudi Aramco Chief Executive Amin Nasser said on Tuesday he expected oil demand growth of between 1.6 and 2 million barrels per day (bpd) in the second half of this year, adding that fundamentals do not support the current drop in oil prices.
Nasser, who heads the world's most profitable oil company, said he expects global oil demand of 104.7 million bpd in 2024 and that some forecasts saw demand of more than 106 million bpd in the second half of the year.
Brent crude was trading at about $76.6 on Tuesday, its lowest since January. Traders said selling had been driven by expectations slower economic growth would reduce demand even as supply concerns mount because of tension in the Middle East.
"The market in my view is overreacting and the fundamentals do not support the drop in prices that we are witnessing today," Reuters quoted Nasser saying on an earnings call.
"The US is pointed (to) as a concern driving the current reaction that we are seeing in the market. Yet, the amount of finished gasoline supplies in the US, a proxy of demand, jumped to 9.4 million barrels a day in May, the highest since 2019."
He also said he expected demand in China to increase in the second half of the year to 17.5 million bpd.
"I would also add there seems to be continued upward revision of demand by various forecasters and agencies, which makes it difficult to make informed investment decisions as the revisions keep surprising to the upside," Nasser said.
Nasser also said he expected governments would replenish strategic crude inventories and that would further contribute to "healthy oil demand for the next few months". He did not specify which ones.
