The Organization of the Petroleum Exporting Countries (OPEC) has cut its forecast for global oil demand growth in 2024 and 2025, the fourth downward revision by the group in a row.
The group said in its monthly report that global oil demand will rise by 1.82 million barrels per day in 2024, down from its forecast last month of 1.93 million barrels per day.
It also cut its estimate for global demand growth in 2025 to 1.54 million barrels per day, from 1.64 million barrels per day.
But OPEC kept its forecast for non-OPEC+ oil supply unchanged from last month at 1.2 million barrels per day in 2024.
For 2025, the report estimated that non-OPEC+ oil supply would stabilize at 1.1 million barrels per day, unchanged from the previous five-month estimate.
There is a wide division among industry experts on the strength of demand growth in 2024, partly due to disagreements over the level of demand from China and the pace of the global shift to cleaner fuels, and OPEC remains at the top of the industry estimates after the revision.
This comes after China’s stimulus plan and concerns about oversupply shocked markets in previous sessions in oil markets, dropping prices to levels of $70 a barrel.
Eight OPEC Plus member states, namely Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and the Sultanate of Oman, are reducing production in order to balance the market. These countries agreed in early November to extend their additional voluntary oil production cuts of 2.2 million barrels per day for a month until the end of next December. OPEC’s reduction in oil demand growth expectations was met by raising its expectations for global economic growth in both the current and next years by a tenth of a percentage point to 3.1% and 3%, respectively. This is driven by raising expectations for the growth of the US economy, the world’s largest crude market. Meanwhile, the organization raised its estimates for China’s economic growth for 2025 only, and kept them for the current year at 4.9%, until the impact of the financial stimulus package launched by the Chinese government to revive the world’s second-largest economy becomes clear.
