The Organization of the Petroleum Exporting Countries has cut its global oil demand projections for both 2024 and 2025 for the fifth successive month, but it has positively adjusted its outlook for economic growth in the United States. Currently, OPEC expects world oil demand to increase by 1.61 million barrels per day in 2023 and by 1.45 million barrels per day in 2025, lowered from prior estimates of 1.82 million barrels and 1.54 million barrels, respectively. OPEC attributes most of the revision to the 2024 projections to the recently released bearish data regarding the third quarter.
The updated forecasts include downward adjustments for the Organization for Economic Co-operation and Development regions in the Americas and Asia Pacific, as well as non-OECD markets such as China and India. In Wednesday's trading, West Texas Intermediate crude oil rose by 1.8%, reaching $69.82 a barrel, while Brent crude increased by 1.4% to $73.21. On Thursday, several members of OPEC and its allies, collectively known as OPEC+, decided to extend voluntary oil production cuts to bolster market stability. OPEC now anticipates that liquid supply from nations not part of the Declaration of Cooperation (DoC) will grow by 1.28 million barrels per day this year; this is an increase from its previous projection of 1.23 million barrels, with almost half of the growth expected to come from the United States.
The organization kept its 2025 supply growth outlook stable at 1.11 million barrels. The OPEC continues to forecast a global economic growth rate of 3.1% for 2024 and 3% for 2025. The growth of the US gross domestic product is now estimated at 2.8% for the current year and 2.2% for 2025, improving from earlier projections of 2.7% and 2.1%, respectively. "The strong momentum in the US is projected to surpass that of its advanced economy counterparts, particularly given expectations of a more US-centered economic policy, amidst relatively slower growth in the Eurozone and Japan," OPEC stated. The outlook for China's economic performance remains steady, with growth anticipated at 4.9% in 2024 and 4.7% in 2025.
Support from both monetary and fiscal stimulus measures is expected to aid China's gradually slowing growth dynamics. However, uncertainties have risen due to concerns over tariffs announced by the incoming Trump administration in the US. "Overall, despite persistent uncertainties such as geopolitical tensions, high sovereign debt, and elevated real interest rates, global economic growth is projected to remain robust in the near term, with possibilities for further enhancement beyond the current forecasts," OPEC concluded..