OPEC cuts oil demand forecasts for 2024 and 2025

OPEC reduced its estimates for the growth of oil demand this year and in 2019. The producer group has now revised their forecasts downward five times in a row.

The weakened outlook shows the challenges facing OPEC+ which includes the Organization of Petroleum Exporting Countries (OPEC) and its allies, such as Russia. OPEC+ delayed its plan earlier this month to increase output until April 2025 due to falling prices.

In a report published monthly, OPEC stated that it expected the global oil demand in 2024 to increase by 1,61 million barrels per daily (bpd), compared with 1.82 million bpd reported last month. OPEC kept its 2024 outlook unchanged up until August. It had originally adopted this view in July 2023.

OPEC stated in its report that "the bulk of this revision was made in the third-quarter, taking into consideration recently received data bearish for the third-quarter."

OPEC stated that China, India, and other Asian countries as well as the Middle East, Africa, and the Middle East were all part of the recent downgrade. OPEC reported that Chinese oil demand fell by 81,000 bpd in October compared to the previous year.

OPEC reduced its estimate of the growth in global oil demand by 2025 to 1,45 million bpd, from 1,54 million bpd.

Brent crude fell below $73 per barrel after the report.

The forecasts for the growth of global demand in 2024 are very different, partly because of differences regarding the demand from China and how fast the world is switching to cleaner fuels.

OPEC's forecast remains at the top of the industry's estimates, while the International Energy Agency's view is much lower.

The IEA, representing industrialized countries, predicts a demand increase of 920,000 bpd by 2024. The agency will update its numbers on Thursday. (Reporting and editing by Louise Heavens, Jason Neely, and Alex Lawler)

(source: Reuters)