In anticipation of the upcoming meeting of OPEC and its allies, known as OPEC+, on November 26, the Organization of the Petroleum Exporting Countries (OPEC) has revised its projection for global oil demand growth in the current year. The revised forecast now stands at 2.5 million barrels per day (bpd), slightly surpassing the estimates released last month. This upward adjustment is driven by robust global growth trends, which have provided strong support to the outlook.
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The latest OPEC forecasts presented in its monthly report helped ease market worries about faltering demand in the United States (U.S.) and China. This contributed to higher oil prices. Brent crude futures for January increased 73 cents to trade at $82.16 a barrel following an initial drop of $1 earlier in the session.
U.S. West Texas Intermediate (WTI) crude futures for December climbed 70 cents higher to settle at $77.87 per barrel.
Monthly report
In the latest monthly report, OPEC maintained its forecast that global oil demand growth in 2024 will rise at a “solid” rate of 2.2 million bdp, unrevised from the prior month’s estimate.
“On the global economic growth front, and as the U.S. economy continues the very strong growth it experienced in the third quarter (Q3) of 2023, the IMF (International Monetary Fund) has recently upgraded Chinese economic growth projection for 2023 to 5.4 percent,” OPEC said in the report.
Revisions to crude demand among Organisation for Economic Co-operation and Development (OECD) countries across the first three quarters of the current year offset each other’s impact. Meanwhile, an upward adjustment to China’s crude consumption in the third and fourth quarters of 2023 outweighed downward revisions for other non-OECD nations in Q3 2023.
Crude demand from OECD countries is forecast to increase by approximately 0.1 million bpd in 2023, while non-OECD nation consumption is predicted to rise by 2.4 million bpd.
OPEC adjusted its forecast for non-OPEC crude supply increases in 2023 to 1.8 million bpd. The revision was led higher by expected gains in production from the U.S., Brazil, Kazakhstan, Norway, Guyana, Mexico and China.
How about projections for next year?
OPEC’s projection for non-OPEC supply growth in 2024 remains unchanged from the prior month’s estimate, at 1.4 million barrels per day.
OPEC noted that according to available secondary sources, its average daily oil production increased in October to 27.9 million barrels.
OPEC made no revisions to its oil demand projections for 2023 and 2024, maintaining its forecasts at 29.1 million barrels per day for 2023 and 29.9 million barrels per day for 2024, identical to last month’s estimates.
Projected oil demand for 2023 is now forecast to be 2 million bpd higher than in 2022.
China’s growth
OPEC said that while the market perception of China’s oil demand and its impact on the global oil market has been overly negative, the latest data indicates Chinese crude imports rose to 11.4 million barrels per day in October.
Imports remained on track to set a new annual record in the current year at around the same level as before.
China’s crude oil imports remain robust, reaching record high levels well above the five-year average. On a monthly basis, imports have risen approximately 240 thousand bpd. Compared to the previous year, annual imports have increased by 1.2 million bpd. India’s crude oil imports are also forecast to climb to an all-time high for the year during Q4 2023.
Global oil demand persists in demonstrating resilience and momentum, with signs pointing to even higher than projected expansion in Q4 2023, primarily within OECD economies.
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