According to the latest report from the Bank of America strategist, the oil market may face a turbulent year. The report warns that crude oil demand is in a stagnant situation, and if global inventories continue to increase, oil prices will "crash". #2024 Macro Outlook#

According to the data from the Bank of America commodity research team, the global oil demand growth rate slowed down to 890,000 barrels per day in the first quarter of this year, and the data shows that consumption will further slow down in the second quarter.

Meanwhile, oil inventories have increased by 1.7 million barrels per day since mid-February.

The Bank of America said: "Supply growth has led to excess, but demand has also played a certain role."

The report shows that demand from the Organization for Economic Cooperation and Development is declining, as well as the demand from non-OECD countries, and the gasoline demand in the United States in the second quarter has decreased by 230,000 barrels per day.

Although the market generally predicts that oil prices will rise in the third quarter, Bank of America researchers say it is currently unclear whether the market will turn from a large surplus to the deficit needed to boost oil prices.

If compliance is high and demand typically picks up in the third quarter, an extension of OPEC+ output cuts will help. But they said that if inventories continue to increase, "oil prices and structures could be under pressure". Refinery margins may fall further, especially in the Atlantic basin where new production capacity is about to come online.

Bank of America's short-term outlook was released after a wider debate erupted last week.

"Peak oil demand" is now taking over the headlines from concerns over a "peak oil" - concerns about a shortage of fuel around the world.

Last week, the International Energy Agency predicted that oil demand would peak in 2029, reopening the case.

Fatih Birol, head of the International Energy Agency, said: "Oil companies may want to ensure that their business strategies and plans are ready. The increase in oil supply may put pressure on oil prices by the end of this century."

OPEC immediately responded, calling the report "dangerous" and saying that such predictions were not included in its long-term forecasts.

Macro View says the debate over peak demand is controversial but slightly off target. What’s more important than when oil demand will peak is how quickly it will decline after that.

Macro View's forecast is that demand will peak around 2030 and then decline rapidly.

(Image Source: Macro View)

But Macro View says one thing to remember about oil demand forecasts is that "relatively small changes" can quickly throw the trajectory off track.

Assistant Economist Joe Maher with Macro View says: "Progress in curbing oil consumption may be stuck in the mud."

Bloomberg reports that the debate is getting hotter, and even the respected International Energy Agency is making mistakes.

A decade ago, some warned that an "oil squeeze" was looming, but that warning never materialized.