OPEC lowers its global oil demand growth forecast for 2024 and 2025

OPEC cut its projection for the global oil demand in 2024 based on data collected so far this season. It also lowered its expectations for next year. This is the second successive downward revision by the producer group.

The weaker outlook highlights the challenges that OPEC+ faces in balancing the markets. OPEC+ is made up of the Organization of Petroleum Exporting Countries (OPEC) and its allies, such as Russia. OPEC+ postponed a plan last week to pump more oil, after the prices fell to their lowest level since 2024.

In a report released on Tuesday, OPEC said that the world's oil demand would rise by 2,03 million barrels per daily (bpd), down from the 2.11 million bpd growth it had predicted last month.

China was the main reason for the downgrade. OPEC lowered its forecasts of Chinese growth from 700,000 bpd to 650,000 bpd by 2024. OPEC stated that the economic challenges in China and the move to cleaner fuels were affecting oil consumption.

OPEC's report stated that "China's economic growth will continue to be supported in the future."

The demand for diesel and gasoline is likely to be affected by the headwinds of the real estate industry and the increased penetration of LNG trucks, electric vehicles and hybrid vehicles.

Brent crude traded below $71 per barrel after the report's release, close to the lowest price since march 2023.

The forecasters are more divided than usual on the growth of oil demand in 2024. This is partly due to disagreements over China, and more generally over the speed of the global transition to cleaner fuels. The reduction leaves OPEC on the high end of industry estimations.

OPEC has also reduced its estimate of global demand growth in 2025 to 1.74m bpd, down from 1.78m bpd. (Reporting and editing by Jason Neely, David Evans, and Alex Lawler)

(source: Reuters)