OPEC said in its monthly report that it expects global oil demand to rise by 2.25 million barrels per day in 2024 compared to growth of 2.44 million barrels per day in 2023. Both forecasts were unchanged from OPEC’s forecast released last month.
China’s lifting of restrictions to curb the spread of the COVID-19 pandemic helped boost oil demand in 2023. OPEC has maintained a relatively optimistic outlook for 2024, expecting stronger demand growth than others such as those of the International Energy Agency.
“Current global economic growth is expected to drive oil demand, especially given the recovery of tourism and air travel,” OPEC said in the report. Pre-COVID-19 levels of overall global oil demand will be exceeded in 2023.”
Oil demand collapsed in 2020. OPEC has repeatedly said it will recover and said in the report that demand will average 102.1 million bpd in 2023, more than the pre-pandemic rate in 2019.
Brent crude prices rose to $91.82 a barrel after the report was released, reaching a new high for 2023.
Durability of the economy
OPEC kept its forecast for global economic growth this year at 2.7 percent and for next year at 2.6 percent, attributing this to the strength of the economy in the first half of the year and a steady trend in global growth that lasted until the third quarter.
“Asian emerging countries, especially India, Brazil and Russia, could make more surprises to the upside, and if the U.S. continues to maintain its current momentum, growth could become higher than expected,” OPEC said.
The report also showed OPEC oil production rose in August, driven by increased output from Iran despite continued U.S. sanctions and voluntary cuts to Riyadh as well as an increase in Nigeria’s output.
OPEC production increased by 113,000 bpd in August to 27.45 million bpd, the report said.
U.S. Energy Information Administration
For its part, the US Energy Information Administration raised its forecast for global oil demand growth in 2023 by 50,000 barrels per day to 1.81 million barrels per day.
In its monthly forecast, the department also lowered its estimate for oil demand growth for 2024 by 250,000 barrels per day to 1.36 million barrels per day.
It expected global oil inventories to fall by 200,000 barrels per day in the fourth quarter of 2023 after Saudi Arabia extended production cuts.
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