The Organization of the Petroleum Exporting Countries reduced its 2024 and 2025 global oil demand projections for the fourth consecutive month, amidst an increase in its world economic growth forecasts. The cartel now anticipates world oil demand to rise by 1.82 million barrels a day this year and by 1.54 million barrels a day in 2025, a decrease from earlier projections of 1.93 million barrels and 1.64 million barrels respectively.
Previous demand forecasts were also revised down in August, September, and October. The new 2024 outlook includes downward adjustments for regions such as China and India, even as regions within the Organization for Economic Co-operation and Development (OECD) Americas and Europe have seen upward revisions.
Despite the drop in the demand forecast for 2025, the organization stated that global oil demand is set to experience "a very healthy increase" in comparison to pre-pandemic levels. In financial markets, West Texas Intermediate crude oil was recorded at $68.30 per barrel in Tuesday afternoon trading, marking a rise of 0.4%, while Brent crude increased by 0.3% to $72. The cartel reported that liquid supply from countries not participating in the Declaration of Cooperation (DoC) is expected to increase by 1.2 million barrels a day this year and 1.1 million barrels a day in 2025, figures remaining unchanged from the last report.
The DoC refers to OPEC+, which includes OPEC and non-OPEC members. Current projections for world economic growth are set at 3.1% for 2024 and 3% for 2025, an increase from prior forecasts of 3% and 2.9%, respectively. The global economy has demonstrated "steady" growth momentum this year, particularly in key economies like the US, Brazil, and Russia.
Recent economic stimulus measures from China and a promising outlook for sustained growth in India have supported the upgrade in the economic forecast. The cartel acknowledges that while further positive developments could occur, some risks remain, including geopolitical uncertainties, high levels of sovereign debt, elevated real interest rates, and a constrained labor market.
In the US, gross domestic product growth is now estimated at 2.7% for 2024 and 2.1% for 2025, improving from earlier estimates of 2.5% and 1.9%, respectively. The US Federal Reserve has reduced its benchmark lending rate by 50 basis points in September, followed by an additional 25 basis points last week.
The September projections from the Federal Open Market Committee suggest the possibility of more rate cuts before the year ends. The OPEC mentioned that even though substantial fiscal stimulus hasn't been factored into the 2024 or 2025 economic outlooks, new information could surface after the presidential election, potentially affecting both fiscal and monetary policy.
Changes in fiscal policy may also influence monetary decisions in 2025, impacting overall growth patterns. Following last week's presidential election, Donald Trump has returned to the White House, leading analysts to note the potential tightening of oil sanctions against Iran under his administration..