Demand for refined oil, especially jet fuel, in Thailand is expected to grow this year despite a projection of slow economic growth, says Thai Oil Plc, the country's largest oil refinery by capacity.
Consumption of jet fuel is expected to increase by 24.2% to 16.8 million litres per day (MLD) on average, up from 13.5 MLD last year, said Pornpiman Srisatabusaya, petroleum value chain analytic manager at Thai Oil.
She attributed the increase to more foreign arrivals in 2024. The Tourism Authority of Thailand expects the numbers to reach 35 million, an increase of 25% from last year.
In 2019, the number of foreign visitors stood at 40 million.
Demand for diesel will also rise by 0.4% to 69.1 MLD on average, up from 68.9 MLD, while demand for gasoline is expected to increase by 3.7% to 32.6 MLD, up from 31.5 MLD in 2023, according to Thai Oil.
Diesel, gasoline and gasohol, a mix of gasoline and ethanol, are currently under the state price subsidy programme.
The consumption of fuel oil, which is used for power generation, will fall by 1.7% to 5.3 MLD, down from 5.4 MLD last year, due to lower demand from power plants.
Several gas-fired power plants used more fuel oil last year to replace costly imported liquefied natural gas (LNG) in an effort to control power generation costs.
Prices of LNG are set to become less expensive in 2024, causing power plant operators to use less fuel oil.
In the global market, oil producers and traders are expected to keep the balance between crude oil demand and supply despite a drop of oil supply in the first quarter, said Ms Pornpiman.
Additional oil production will come from non-Opec countries, including Canada, the US, Brazil and Guyana.
On the demand side, China will consume less oil, largely due to the impact of problems in its real estate sector, which affects oil demand.
Oil demand in the US is expected to grow steadily as the Federal Reserve signalled it would cut interest rates this year.
In the EU, oil demand may grow slightly or remain flat due to concerns over an economic recession.
According to the International Energy Agency, global demand for crude oil will rise by 1.4 million barrels per day in 2024.