The Organization of Petroleum Exporting Countries (OPEC) cut on Monday its global oil demand growth forecast for 2024 on weaker expectations for China’s oil demand growth in 2024. The organization also cut next year’s forecast.
In its latest monthly report, OPEC stated that world oil demand will rise by 2.11 million barrels per day (bpd) in 2024, down from growth forecasts of 2.25 million bpd last month. OPEC also cut next year’s demand growth estimate to 1.78 million bpd from the previous 1.85 million bpd.
“This slight revision reflects actual data received for 1Q24 and in some cases, 2Q24, as well as softening expectations for China’s oil demand growth in 2024,” stated the report.
OECD demand to grow
The report added that the Organization for Economic Cooperation and Development’s (OECD) oil demand will likely grow by around 0.2 million bpd in 2024, while non-OECD oil demand will increase by around 1.9 million bpd. In 2025, OPEC expects OECD demand to expand by about 0.1 million bpd, with OECD Americas contributing the largest increase. Non-OECD demand is set to drive next year’s growth, increasing by about 1.7 million bpd mainly due to contributions from China, the Middle East, Other Asia, and India.
“Despite the slow start to the summer driving season compared to the previous year, transport fuel demand is expected to remain solid due to healthy road and air mobility,” added OPEC.
Amin H. Nasser, chief executive of Saudi energy giant Aramco, recently said that he expects global oil demand to reach 104.7 million barrels per day (bpd) in 2024, indicating a demand forecast of more than 106 million bpd in the second half of the year.
Read: OPEC+ keeps oil policy unchanged, restates plans to ease cuts starting October
China demand diverges forecasts
This decline in the global oil demand growth forecast is OPEC’s first reduction since July 2023. China’s demand caused a wider split between forecasters on demand growth this year. For instance, the International Energy Agency sees much lower demand growth than OPEC of 970,000 bpd in 2024. The IEA will also update its forecasts this week.
Crude spot prices rose for the second month in July, as physical crude market fundamentals remained solid throughout July and August’s trading cycles. This has partly offset the negative impacts of heavy selloffs in crude futures markets that raised uncertainty and limited price gains. In July, the OPEC Reference Basket rose by $1.21 or 1.5 percent month-on-month to $84.43 per barrel.
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