Oil demand forecast: what's the outlook?

Thursday, 16 July 2026

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Oil & Energy Intelligence

Market Commentary

China Expands Energy and Trade Partnerships in Central Asia

China's expansion of energy and trade partnerships in Central Asia marks a significant shift in the region's energy landscape, as it secures access to vital resources and enhances its influence. This strategic move is likely to increase investment in oil and gas infrastructure, potentially boosting production capabilities and altering supply dynamics, which could lead to fluctuations in global oil prices. Additionally, China's focus on diversifying its energy sources, including nuclear power, may reduce its reliance on oil, dampening demand in the region and impacting market dynamics. Investors should remain vigilant, as these developments could reshape energy alliances and influence pricing in the global oil market.

The Growing Significance of Artificial Intelligence in the Energy Sector

The recent analyst upgrades for NXT and POWL have propelled their stock prices, highlighting the growing significance of artificial intelligence in the energy sector. This shift is likely to enhance operational efficiencies and optimize supply chain management, which could lead to more stable oil prices as producers adjust output in response to improved demand forecasting. As energy companies increasingly invest in AI technologies, we may see reduced operational costs and heightened profitability, attracting further capital into the sector and potentially reshaping the competitive landscape for oil and gas. The implications for oil demand are substantial; improved efficiency could alter consumption patterns, influencing both short-term price dynamics and long-term strategies in a market that is also increasingly focused on sustainability.

Gasoline Reversal Could Unwind June’s Inflation Cooldown

The potential reversal in gasoline prices, as highlighted by Truflation's Oliver Rust, poses a significant risk to the recent cooling of inflation, which could directly impact oil markets. A rebound in gasoline prices may negate the temporary relief consumers experienced in June and could prompt a more hawkish stance from the Federal Reserve, influencing interest rates and overall economic growth. This scenario is likely to elevate crude oil demand forecasts in the U.S., where gasoline consumption plays a pivotal role, while also raising concerns about persistent inflation dampening consumer spending. Investors should closely monitor these developments, as rising gasoline prices could trigger a ripple effect across the energy sector, affecting refining margins and LNG pricing amid an already complex supply-demand landscape.

Strait of Hormuz Oil Flows Fall Toward Pre-peace Deal Levels as War Reignites

The recent decline in oil flows through the Strait of Hormuz, nearing pre-peace deal levels, indicates a tightening global oil supply that is likely to push prices higher. As this vital chokepoint faces renewed conflict, market volatility is expected to increase, with heightened risk premiums reflecting concerns over potential disruptions to shipments. Investors should prepare for possible supply shocks, particularly if Iranian exports diminish or military actions impede shipping lanes, which could prompt OPEC+ to reconsider production strategies. In the short term, Brent crude prices may test resistance levels as the market reacts to these geopolitical tensions and their implications for future energy demand.

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Oil Company News

TotalEnergies: Second Quarter 2026 Update

(LSE:TTE) (NYSE:TTE) TotalEnergies SE reported that hydrocarbon production for the second quarter 2026 is expected to be at nearly 2.4 Mboe/d. The impact of the Middle East conflict for the second quarter is around 210 kboe/d, which is below the guidance communicated last quarter of 360 kboe/d. Exploration & Production cash flow is expected to increase by around $1 billion vs first quarter, reflecting an increase of the average liquids prices (+$17.9/b over the quarter, vs $22.7/b for Brent). A decrease in working capital between $1 and 1.5 billion is anticipated over the quarter, mainly related to the impact of lower hydrocarbon prices at the end of the quarter on inventories. Quarterly net investments are expected to be in line with the annual guidance of $15 billion, and the gearing ratio is expected to improve by 2 points at the end of the second quarter of 2026. Integrated LNG cash flow and results are expected to decrease significantly, affected by an underperformance in gas trading activities amid a broadly flat to declining European market. Integrated Power cash flow is expected to increase strongly supported by the closing of the transaction with EPH on April 29.

Orcadian Energy : Earlham & Orwell Gas Development Concept

(AIM:ORCA) Orcadian Energy plc announces that it has commenced the Assessment Phase for the development of the Earlham and Orwell gas fields on its 100% owned licence, P2680. The preferred development concept is an offshore power station with integrated carbon capture, fuelled by Earlham and Orwell gas, generating approximately 200 MW of electrical power (IT load) for a co-located offshore data centre. Earlham gas is 49% carbon dioxide, and the methane resources in Earlham amount to 114 bcf, with the Orwell field able to produce a further 31 bcf of methane. Orcadian has agreed a deferred repayment schedule for all loans made by The Independent Power Corporation Limited, totalling approximately £1.34 million, including capitalised interest, at 30 June 2026, now repayable by 31 December 2027 with interest fixed at 8.5% per annum. The company is establishing a new company called Earlham Gigagrid Ltd to incubate this project and intends to assign its 100% interest in P2680 to a subsidiary of Gigagrid. The Directors believe this could be among the first offshore data centres of scale in the UK and that the project could, over time, support the UK's ambitions to maximise the opportunities of AI and deliver value to Orcadian's shareholders. The Directors expect the ultimate developers in the construction of the power station and data centre facilities will come from the ranks of the Hyper-scalers (such as Google, Amazon, Meta and Microsoft) and/or the Neo-scalers (such as CoreWeave, Nebius, Lambda Labs, Crusoe Cloud, and Vultr).

Sunda Energy Applies for Offshore Taranaki Basin Exploration Permit

(LSE: SNDA) Sunda Energy has applied for a petroleum exploration permit covering approximately 645 km² in the offshore Taranaki Basin, which includes the Awakino gas condensate field. The application has been accepted by New Zealand Petroleum and Minerals, initiating a three-month competitive process for other companies to submit offers, concluding on October 14, 2026. Sunda Energy plans to reprocess 450 km² of 3D seismic data within 36 months of the permit award to delineate the Awakino gas field and support further appraisal. This development is significant for oil and gas investors as it highlights Sunda Energy's commitment to expanding its exploration activities in a region known for its hydrocarbon potential, potentially leading to increased production and revenue opportunities in the future. Investors should monitor the outcome of the competitive bidding process closely.

Greenfire to Acquire Canadian Oil Sands Producer Connacher for $900m

(NYSE: GFR) Greenfire Resources has announced its acquisition of Connacher Oil and Gas for approximately C$1.27 billion ($900.4 million) in an all-cash deal. Connacher, a privately owned thermal oil sands producer, fully owns the Great Divide oil sands project in Alberta, which is expected to produce an average of 19,500 barrels per day (bpd) by 2026, with a steam-oil ratio of nearly 3.0. The Great Divide project boasts estimated proved plus probable (2P) reserves of around 441 million barrels, providing a substantial 62-year reserve life index. This acquisition is significant for oil and gas investors as it enhances Greenfire's production capacity and resource base, positioning the company for long-term growth in the oil sands sector. Overall, this strategic move could strengthen Greenfire's market presence and financial performance in the evolving energy landscape.

InPlay Oil Corp. | TSX: IPO

• Calgary-based light oil producer combining operational expertise with focused Alberta assets.

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For informational purposes only. Not financial advice.

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