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J.P. Morgan (JPM) foresees an acceleration in demand for oil, as it expects a travel trend that emerged from the pandemic to keep running.
In the firm’s 2024 mid-year outlook released last last week, its commodity analysts said they expected a seasonal uptick in oil demand to begin shortly. They projected demand for crude and products to surge by 3.5 million barrels per day and 2.4 mbd, respectively, between between April and August.
“Revenge summer travel continues,” with a “chart-busting summer of travel” forming, JPM said.
The International Air Transport Association (IATA) said Wednesday it expects a record high 4.96 billion passengers traveling in 2024. The trade group representing roughly 330 airlines worldwide projected industry net profit climbing to $30.5 billion this year from $27.4 billion in 2023. Industry expenses are also expected to increase +9%, with jet fuel prices averaging $113.8 a barrel.
Separately on Wednesday, weekly commercial crude stocks unexpectedly fell by 12.2 million barrels, the Energy Information Administration said, compared with an expected rise of 3.6 million barrels. Oil prices (CL1:COM)(CO1:COM) moved higher following the report.