Sources close to the Organization of the Petroleum Exporting Countries (OPEC) said: “The organization is likely to maintain its optimism about oil demand growth for next year in its forecasts that it publishes this month,” as it believes that it will slow compared to the current year, but remains above average.
Likely, that (OPEC) crude growth demand expectation in 2024 will be lower than that for the current year, which amounts to 2.35 million barrels per day, or 2.4% of total production, which is an unusually high rate as the world emerges from the “Corona” pandemic.
Even if it retreats from this figure, it will remain much higher than the annual average for the past decade, except for the years of the pandemic, and will exceed the expectations of the International Energy Agency, which sees a significant slowdown in demand growth next year, to 860,000 barrels per day.
A dispute has erupted between (OPEC) and the International Energy Agency repeatedly in the past few years, as the organization criticizes the agency, which advises industrialized countries, for what it considers irresponsible expectations, and the subsequent data revisions.
The growth in oil demand is a potential strength indication of the oil market, and it is one of the factors influencing the production policy decisions taken by (OPEC) and its allies, which together form the (OPEC +) bloc. In June, the group extended supply curbs until 2024 to support the market as prices slumped on demand concerns.
As for 2024, three sources from (OPEC) said that demand growth would likely slow, but it will not be as severe as the International Energy Agency expects, it is also likely to exceed one million barrels per day, but below two million. A fourth source close to (OPEC) said that demand is likely to rise by at least 1.5 million barrels per day.
A source in the organization said, “It is expected that the oil demand increase in 2024 will be much less than in 2023,” adding that it may range between 1.5 and 1.7 million barrels per day. OPEC is expected to publish its first demand forecast for 2024 in its monthly report on July 13. Another source said about the (OPEC) vision for demand in 2024: “It will be more optimistic than the International Energy Agency.”
Senior officials from countries with a vision of (OPEC) demand in 2024, which will be more optimistic than the International Energy Agency, expressed at a conference this week, such as Amin Nasser, CEO of the oil-producing Saudi Aramco, and expressed optimism about the outlook for demand for crude, despite one of the adverse economic factors affecting prices. Nasser said, «Asia is growing. Demand grew in China alone between 2019 and 2023 by three million barrels per day and in India by one million barrels per day, so there is an increase in demand.
Oil forecasters often have to make significant revisions due to changes in the economic outlook and geopolitical fluctuations, which this year-included China’s abandonment of COVID-19 restrictions and interest rate hikes.
(OPEC) initially expected demand growth in 2023 by 2.7 million barrels per day in its first forecast published in July 2022 before it was later revised downward to 2.35 million barrels per day (Reuters).