In January, global oil demand surged to 101.5 million barrels per day, analysts at J.P. Morgan said in a research note sent to Rigzone by the JPM Commodities Research team this week.
The analysts outlined in the note that this figure marked “a robust year over year increase of 1.5 million barrels per day” and highlighted that it surpassed their monthly projections “by 200,000 barrels per day”.
“The early signs are promising, hinting that this upward momentum will carry into February, fueled by the chill of U.S. winter and the bustling travel scene across Asia,” the analysts stated in the research note.
“The appetite for heating oil is on the rise in the U.S., with the four-week average distillate demand reaching heights not seen since March 2022,” they added.
“Meanwhile, in Asia, China’s New Year holiday travel volumes over the 17-day period starting January 19 soared by eight percent compared to last year, outpacing the official forecast of seven percent,” they added.
“In India, the fervor of travel extends into February, driven by a religious pilgrimage anticipated to draw 450 million devotees between January and February, as per government estimates,” they continued.
The J.P. Morgan analysts also stated in the note that global observable oil inventories saw an increase of seven million barrels in the final week of January.
“This net gain was primarily driven by a substantial 20 million barrel rise in global crude oil inventories, partially offset by a 13 million barrel decline in oil product inventories,” they said.
“Regionally, despite a significant 19 million barrel drawdown in Chinese crude oil stocks, U.S. crude oil inventories rose by nine million barrels, with the remainder of the global crude increase occurring outside the main regions we monitor,” they added.
“Over the course of January, global observable oil inventories experienced a drawdown of 78 million barrels, led by a 58 million barrel reduction in crude oil stocks, complemented by an additional 20 million barrel decrease in oil product inventories,” they went on to state.
The analysts also stated in the note that “reported visible OECD commercial oil stocks (including the U.S., Europe, Japan, and Singapore) recorded a net reduction of five million barrels in the final week of January”.
“This decline was primarily driven by a 16 million barrel reduction in oil product stocks, although an 11 million barrel increase in crude oil stocks helped to mitigate the overall decrease,” they said.
“The week’s stock movements were largely influenced by U.S. oil inventories, where oil product stocks fell by 11 million barrels due to heightened demand for heating fuel, while crude oil inventories rose by nine million barrels, marking the largest weekly increase since February 2024,” they added.
“Throughout January, visible OECD commercial oil stocks reported a net draw of 24 million barrels, led by a 31 million barrel reduction in oil product stocks, while crude oil inventories saw an increase of seven million barrels,” the analysts noted.
In a separate research note sent to Rigzone by the JPM Commodities Research team on January 8, J.P. Morgan analysts said, “early indicators of oil demand suggest a strong start to January, likely driven by increased use of heating fuels in the Northern Hemisphere due to the cold weather”.
“We anticipate that oil demand will average 101.4 million barrels per day for the month, marking a 1.4 million barrel per day increase compared to the same period last year,” the analysts said in that report.
“Global oil demand is expected to remain strong throughout January, fueled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays,” the analysts added.
To contact the author, email
