OPEC Reduces Global Oil Demand Growth Forecast

Investing.com – The Organization of the Petroleum Exporting Countries (OPEC) has reduced its forecast for global oil demand growth this year, citing weakness in China, the world’s largest crude importer.

OPEC stated in a monthly report that world oil demand will rise by 2.11 million barrels per day in 2024, down from the previously expected 2.25 million bpd.

“This slight revision reflects actual data received for the first quarter of 2024 and, in some cases, for the second quarter, as well as softening expectations for China’s oil demand growth in 2024,” OPEC noted in the report.

Despite a slow start to the summer driving season compared to the previous year, OPEC expects transport fuel demand to remain solid due to healthy road and air mobility.

This marks the first reduction in OPEC’s 2024 forecast since it was initially made in July 2023. The organization had previously maintained expectations for relatively strong growth in global oil demand for 2024, citing resilient economic growth and increased air travel that would support fuel use during the summer months.

Even after this reduction, OPEC still anticipates stronger growth than the International Energy Agency (IEA), which is typically relied upon by industrialized countries for information. The IEA predicts demand growth of 970,000 bpd this year but is expected to update its figures this week.

Additionally, OPEC cut next year’s demand growth estimate to 1.78 million bpd from the previously anticipated 1.85 million bpd.

OPEC+, which includes OPEC and its allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. In June, they agreed to extend the latest cut of 2.2 million bpd until the end of September, with plans to gradually phase it out from October.