OPEC has maintained its forecast for relatively strong growth in global oil demand in 2024, despite lower-than-expected use in the first quarter. The organization cites expectations that travel and tourism will support consumption in the second half of the year.
Unchanged demand projections
In its monthly report, the Organization of the Petroleum Exporting Countries stated that world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. These forecasts remain unchanged from the previous month.
Robust oil market conditions ahead
Furthermore, OPEC’s assessment echoes other recent reports flagging robust oil market conditions heading into the latter half of 2024. On Monday, oil prices rose 3 percent after Goldman Sachs predicted that transportation demand would push the market into a deficit in the third quarter.
Steady economic growth and travel outlook
According to OPEC, steady global economic growth has continued through the first half of 2024, and the organization forecasts world oil demand will increase by 2.3 million bpd in the second half of the year. Moreover, OPEC noted that the “services sector maintains a stable momentum” and cited travel and tourism as key factors that will positively impact oil demand.
OPEC+ output cuts extended
OPEC+, which includes OPEC members as well as allies like Russia, has implemented a series of output cuts since late 2022 to support the market. Additionally, the group recently agreed to extend the latest 2.2 million bpd cut until the end of September, gradually phasing it out from October onwards.
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