OPEC has revised its global oil demand growth forecast for 2024, citing weaker-than-expected data for the first half of the year and tempered expectations for China’s economic performance.
The Organization of the Petroleum Exporting Countries, in its latest monthly report, now predicts that world oil demand will increase by 2.11 million barrels per day (bpd) in 2024, down from the 2.25 million bpd growth anticipated just a month ago.
“This slight revision reflects actual data received for the first quarter of 2024 and, in some cases, for the second quarter, as well as softening expectations for China’s oil demand growth in 2024,” the report stated. Despite the slow start to the summer driving season, OPEC remains optimistic that transport fuel demand will stay robust due to strong road and air mobility.
This marks OPEC’s first reduction in its 2024 forecast since the projection was initially made in July 2023. The adjustment highlights the growing uncertainty among forecasters about the strength of oil demand in the coming year, particularly in relation to China and the global shift towards cleaner energy sources.
OPEC’s revised forecast still sits at the higher end of industry estimates, with oil prices remaining steady above $80 a barrel following the report’s release. The organization also reduced its demand growth estimate for next year to 1.78 million bpd from the previously expected 1.85 million bpd, Reuters news report said.
The report comes as OPEC+—which includes OPEC members and allies like Russia—continues to implement output cuts to support the market. The group agreed in June to extend the latest cut of 2.2 million bpd until the end of September, with plans to gradually phase it out starting in October.
The International Energy Agency (IEA), representing industrialized nations, has a more conservative outlook, projecting much lower demand growth of 970,000 bpd in 2024. The IEA is expected to update its figures later this week.