Oil Demand Outlook Darkens: OPEC Cuts Growth Forecast for 2024, 2025
On Tuesday, OPEC revised its global oil demand growth forecast for 2024, signalling the second consecutive month of downward adjustments. The revised forecast is based on the data collected this year, which indicates that demand growth will be sluggish in the upcoming year.
The enduring challenge for OPEC+, which includes the Organisation of the Petroleum Exporting Countries and allies such as Russia, in managing the oil market is underscored by the reduced forecast.
OPEC+ has recently postponed its intentions to increase oil production in response to the lowest oil prices in 2024.
In its monthly report, OPEC anticipated a 2.03 million barrels per day (bpd) increase in global oil demand in 2024, a decrease from the 2.11 million bpd forecast issued the previous month.
The majority of the downgrade is attributable to China, where demand growth is now anticipated to reach 650,000 bpd in 2024, a decrease from the previous estimate of 700,000 bpd.
OPEC acknowledged that China’s economy is currently facing economic challenges and a transition to greener energy sources.
In its report, OPEC reported that China’s economic development is still anticipated to be well-supported. However, the demand for diesel and petrol may be reduced by the real estate sector’s challenges and the increasing use of electric vehicles and LNG trucks.
In addition, OPEC reduced its prediction for the global oil demand growth in 2025, reducing it from 1.78 million bpd to 1.74 million bpd.
Morgan Stanley analysts reduced their Brent crude oil forecasts for the forthcoming quarters in a note to clients this week. The bank is of the opinion that the global oil market is currently experiencing a period of decreased demand.
