Captured and Clueless

For many years I've read the International Energy Agency's views on the global energy market but over the past decade or so - under the leadership of self-avowed renewable energy acolyte, Fatih Birol - the agency has deviated from its historical role as independent and impartial commentator on the state of global energy markets, instead becoming an unbridled propaganda machine for the Great Green Grift.

No more evident is that organisation having being captured by the Cult of Climate than in its always-wrong predictions of the underlying demand for fossil fuels.

Not a year goes by that it doesn't have to disguise the fact that its global Oil price demand forecasts need upward revision, and in relation to Coal it has been similarly incompetent.

In the mid-2010s, the IEA was predicting global coal demand to flat-line from then onwards.

But it didn't; instead, it kept increasing every year. Then, when Covid hit, the blatantly duplicitous IEA conflated the resulting slowdown in coal demand as evidence of coal at last entering a death spiral. But then, when global economic activity rebounded after Covid magically went away, resulting in double-digit increase in coal demand to pre Covid levels, the IEA's line was, "No, no. That's not real demand growth; it's merely a reflection of temporary re-stocking".

In 2022 the IEA was calling for demand to peak in 2023. To wit:
"With growth in India and ASEAN offsetting declines in the European Union and the United States, China remains the decisive player for setting the trend of global coal demand. Higher renewable growth than overall electricity demand growth is likely to push global coal consumption on a downward trajectory. This would imply that coal is likely to peak in 2023."

But that was not to be; coal demand continued to grow. So, in its Coal 2023 report, the IEA simply repeated its dismal prediction, saying coal demand was now going to fall in 2024: "We expect to see a trend emerging of declining worldwide coal demand, starting in 2024."

Well, fast forward to 2024 and Coal demand has increased, yet again "During the first six months of 2024 we expect global coal consumption to have grown by 1.0% to a total of 4 308 Mt." (source: IEA Coal 2024)

The striking aspect of that coal demand growth in 2024 is that it is occurring despite:

1.) the Chinese economy being in a funk, with oversupply problems in the property market putting the brakes on energy-intensive infrastructure investment,
2.) a contraction in industrial production in Europe and
3.) the US economy's dramatic slowing (something which in the last few days is kicking global stock markets in the guts).

The current dour global economic outcome would certainly not have been incorporated into the IEA's modelling for declining demand.

At any other time, against that sort backdrop of synchronised global economic slowdown, the coal price would be closer to previous cyclical troughs (~US$60/t), as opposed to the current US$145/t, which is higher, even, than the 2011/12 peak of US$125/t, when global GDP growth was booming as it rebounded from the GFC, and China was at its peak industrialisation/infrastructure build.

In its ongoing anti-fossil fuel propaganda, the IEA is now saying (in its Coal 2024 report) that next year is the year that demand will fall:

"In 2025, we estimate global coal demand to enter a trend reversal after four years of growth, decreasing slightly by 0.3% to a total of 8 714 Mt. "

So, when coal demand continues to go up despite the current global economic slump, falling interest rates over the next 12 months - which will presumably portend a recovery in the global economy - will somehow be accompanied by a decline in demand for coal.

Sure.
Of course it will.

In every year over almost the past decade, coal demand was ostensibly going to fall "next year", according to the ideologically biased folk at the IEA.

Global coal demand is today several hundreds of millions of tonnes higher than when the IEA, and it's fellow climate-fixated ideologues, first said coal demand was about to roll over for good.

The IEA - captured and clueless.

One can't complain though; it's this sort of egregiously flawed thinking and analysis that has created the opportunity to profit from investing on those opposite side of it.