The Organization of the Petroleum Exporting Countries (OPEC) has made significant adjustments to its global oil demand forecasts for the years 2024 and 2025, reflecting changing economic conditions and growth outlooks in key markets. On Monday, OPEC announced a decrease in its oil demand growth forecast by 135,000 barrels per day, bringing the revised estimate to 2.11 million barrels a day for 2024. This revision was primarily influenced by performance data from the first and second quarters of the year and the ongoing weakening expectations for China's oil demand growth in 2024.
Despite this adjustment, OPEC characterized the new 2024 forecast as "healthy," remarking that it remains considerably above the historical average of 1.4 million barrels per day observed prior to the onset of the COVID-19 pandemic. For 2025, OPEC projects an increase in global oil demand, predicting a rise of 1.78 million barrels per day, which is now 65,000 barrels less than the earlier outlook provided in July.
Notably, the report indicates that the growth in demand for both 2024 and 2025 is anticipated to be primarily driven by nations outside of the Organization for Economic Co-operation and Development (OECD). In terms of pricing, West Texas Intermediate (WTI) crude oil saw a gain of 2.5%, reaching $78.72 per barrel during intraday trading on Monday, while Brent crude rose by 2% to $81.26.
This recent performance marked the first weekly gain for both types of crude oil in five weeks, indicating a potential stabilization in the market. Additionally, OPEC's report highlights that the supply of liquids from countries not involved in the Declaration of Cooperation (DoC) is expected to increase by 1.23 million barrels per day in 2024, a figure that remains unchanged from previous assessments.
The growth is likely to be led by the US, Canada, and Brazil, with the outlook for production growth in 2025 remaining steady at 1.1 million barrels per day. The DoC refers to the alliance formed by OPEC and its non-OPEC partners. Furthermore, OPEC has projected world economic growth at 2.9% for both 2024 and 2025, maintaining this forecast since the previous month.
In its August report, the organization revised its economic growth forecast for the United States upwards from 2.2% to 2.4% for 2024. The forecast for 2025 remains unchanged at 1.9%. While the robust economic performance of the US in the first half of 2024 has contributed to these positive forecasts, there are concerns regarding the economic situation in Japan, which is now expected to grow by only 0.2% in 2024, down from the previous estimate of 0.3%.
The OPEC's insights underscore the intricate balance between global oil supply, demand, and the economic variables impacting these trends..