In its latest monthly report, OPEC reaffirmed its projections for strong growth in global oil demand in 2024 and 2025, while also revising its economic growth forecasts for those years upwards, suggesting the potential for even greater growth. According to OPEC, world oil demand is expected to increase by 2.25 million barrels per day (bpd) in 2024 and by 1.8 million bpd in 2025, the same as last month’s forecast.
In 2025 global oil demand growth is expected to see a robust growth of 1.8 mb/d, y-o-y. The OECD is expected to grow by 0.1 mb/d, y-o-y, while demand in the non-OECD is forecast to increase by 1.7 mb/d #MOMR pic.twitter.com/OWqCH5ZG43
— OPEC (@OPECSecretariat) February 13, 2024
The prospect of increased economic growth could further bolster oil demand. OPEC’s forecast for demand growth in 2024 already exceeds that of other forecasters, such as the International Energy Agency (IEA), although the broader OPEC+ alliance is still reducing output to support the market. OPEC noted that a “positive trend” in economic growth is anticipated to continue into the first half of 2024, prompting a 0.1 percentage point upward revision in its economic growth projections for both 2024 and 2025.
In its report, OPEC stated, “Global economic growth remains robust,” and highlighted the potential for additional upside in major OECD and non-OECD economies. Conflict in the Middle East and supply disruptions have provided support to oil prices in 2024, although concerns about persistently high interest rates have had a dampening effect. As of Tuesday, Brent crude was trading around $82 per barrel, representing a 0.5 percent increase.
Various factors contributing to price rise
OPEC attributed the recent price rise to various factors, including reduced speculative selling pressure, supply disruptions, stronger-than-expected macroeconomic data, and indications of a robust oil market foundation. The organization now anticipates global economic growth of 2.7 percent in 2024 and 2.9 percent in 2025, bolstered by expectations of ongoing inflation moderation throughout this year and the next.
Regarding oil demand growth for this year, OPEC’s projection exceeds the IEA’s forecast of a 1.24 million bpd expansion. The IEA, which represents industrialized nations, is set to release an updated forecast on Thursday.
Slight price increases
Following OPEC’s decision to maintain its global oil-demand growth forecast and increase its economic forecast for the current and upcoming year, oil prices have remained relatively stable. Brent crude is trading with at $82.66 per barrel, while WTI has risen to reach $77.80 per barrel.
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