JP Morgan Says Oil Demand in Early May ‘Indicates Tepid YoY Growth’

Global oil demand in early May indicates a tepid year over year growth, analysts at J.P. Morgan, including Natasha Kaneva, Head of Global Commodities Strategy at the company, said in a research note sent to Rigzone by the JPM Commodities Research team on Thursday.

“The final figures for global liquids demand in 1Q25 aligned with our forecast, increasing by 1.6 million barrels per day year over year,” the analysts said in the note.

“Preliminary data for April indicate consumption was flat with last year’s levels and 500,000 barrel per day below our expectations. The weakness appears to have extended into early May,” they added.

In the research note, the J.P. Morgan analysts stated that, as of May 6, global oil demand averaged 103.5 million barrels per day. They pointed out in the note that this marked an increase of 280,000 barrels per day on year ago levels, which they said “is nearly half of the anticipated pace of 550,000 barrels per day for the month”.

“We anticipate that oil demand will likely improve in the coming weeks as the summer driving season kicks off in the northern hemisphere,” the J.P. Morgan analysts went on to state.

In the note, the J.P. Morgan analysts said that, in the first week of May, “visible OECD commercial oil stock (including the U.S., Europe, and Singapore) reported a four million barrel decline”. The analysts noted that a six million barrel drop in oil products stocks was partially offset by a two million barrel increase in crude oil stocks.  

“Globally, total liquid stocks increased by eight million barrels in the first week of May, marking seven increases over the past eight weeks,” the J.P. Morgan analysts said in the research note.

“Observable oil product stocks experienced a drawdown of three million barrels, while crude stocks rose by 11 million barrels. The continued build in crude stocks is primarily driven by a significant increase in Chinese crude stocks, which reported a 26 million barrel build,” they added.

In a research note sent to Rigzone by the JPM Commodities Research team on April 30, J.P. Morgan analysts, including Kaneva, said “in April, global oil demand averaged 102 million barrels per day, remaining unchanged from year ago levels, making a significant shift from the 1.7 million barrel per day growth observed in the first quarter”.

“Our estimates from the Year Ahead Outlook had projected a 500,000 barrel per day growth in oil demand for April,” they added in that research note.

“The uncertainty surrounding the economic outlook likely contributed to stalled growth,” they went on to state.

In that research note, the J.P. Morgan analysts highlighted that, “in the final week of April, visible OECD commercial oil stock (including the U.S., Europe, Japan, and Singapore) reported a marginal decline of 280,000 barrels”.

The analysts said in that note that an 8.4 million barrel drop in crude oil stocks was largely offset by an 8.1 million barrel increase in product stocks. For the month of April, OECD commercial stocks rose by five million barrels, the analysts stated.  

“Globally, total liquid stocks rose by 17 million barrels in April, marking the third consecutive monthly increase,” the J.P. Morgan analysts highlighted in the April 30 research note.

“However, the pace of stockpiling slowed from 44 million barrels in February and 33 million barrels in March,” they added.

“Observable oil product stocks reported a modest two million barrel increase in April, marking the first monthly build in 2025. Year to date, global liquid stocks have risen by 62 million barrels, supported by a 102 million barrel increase in crude stocks, while oil products decreased by 39 million barrels,” the J.P. Morgan analysts went on to state.

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