OPEC Sticks to 2024 Oil Demand View, Sees Strong Travel Season.
The Organization of the Petroleum Exporting Countries (OPEC) reaffirmed its forecast for robust growth in global oil demand for 2024 and 2025, driven by resilient economic growth and increased air travel during the summer months.
In its monthly report, OPEC maintained that world oil demand would rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025, consistent with previous forecasts.
“Expected strong mobility and air travel in the Northern Hemisphere during the summer driving/holiday season is anticipated to bolster demand for transportation fuels and drive growth in the United States,” OPEC noted.
The oil industry is divided on the outlook for oil demand growth this year and the medium term, partly due to varying opinions on the pace of the global transition to cleaner fuels. Earlier on Wednesday, BP forecasted that oil demand would peak next year.
OPEC+, which includes OPEC members and allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. The group agreed on June 2 to extend the latest cut of 2.2 million bpd until the end of September and gradually phase it out from October.
OPEC also raised its forecast for world economic growth this year to 2.9% from 2.8%, with potential for further upside, citing momentum outside developed countries in the Organization for Economic Cooperation and Development (OECD).
“Economic growth momentum in major economies remained resilient in the first half. This trend supports an overall positive growth trajectory in the near term,” OPEC stated.
Following the release of the OPEC report, oil prices remained steady, with Brent crude trading below $85 a barrel.
OPEC’s demand forecasts are on the higher end compared to other industry expectations. While OPEC has not predicted when oil demand will peak, BP anticipates it will occur next year, as outlined in its annual Energy Outlook.
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The International Energy Agency (IEA), representing industrialized countries, expects a much lower demand growth of 960,000 bpd for 2024 and will provide an update on its forecast on Thursday.
OPEC’s report also points to a looming oil supply deficit in the coming months and in 2025, a larger shortfall than that predicted by the U.S. Energy Information Administration (EIA) on Tuesday.
According to the OPEC report, the demand for OPEC+ crude is projected at 43.6 million bpd in the third quarter, significantly more than the group’s current output. This indicates a substantial gap that could influence future production decisions and market dynamics.
