The Organization of the Petroleum Exporting Countries has made notable adjustments to its 2024 and 2025 global oil demand projections while keeping supply estimates steady. In its latest monthly oil report, the cartel has lowered its demand growth estimate for this year to 1.93 million barrels a day, revised down from 2.03 million barrels proclaimed in September.
This modification stems from receiving actual data and slightly lower demand expectations in various regions. For next year, the 2024 headline outlook still remains "well above" the historical average of 1.4 million barrels per day seen before the COVID-19 pandemic. OPEC notes that oil demand in member nations outside of the Organization for Economic Co-operation and Development, or OECD, has been revised downward to an anticipated increase of 1.80 million barrels a day for 2024, down from the previous estimate of 1.9 million barrels projected in the September report.
China is poised to lead this growth trajectory. Conversely, estimates within OECD were adjusted higher, primarily due to a projected improvement in US oil demand. The cartel has also updated its forecast for oil demand in 2025, now estimating a rise of 1.64 million barrels per day, down from its earlier outlook of 1.74 million barrels.
Non-OECD demand is expected to grow by 1.54 million barrels a day next year, a decrease from OPEC's earlier figure of 1.64 million barrels per day as of last month, with China again taking the lead in this growth. It is significant to note that OPEC has previously trimmed its 2024 and 2025 demand forecasts earlier in its August and September monthly reports.
In the market, West Texas Intermediate crude oil was observed down 2% to $74.06 a barrel in the trading session on Monday, while Brent experienced a decline of 1.9%, settling at $77.50. Both types of crude futures had logged gains over the past two weeks, reflective of the heightened uncertainty surrounding the geopolitical situation in the Middle East. OPEC has indicated that the liquid supply from countries not engaged in the Declaration of Cooperation, or DoC, is projected to grow by 1.2 million barrels a day this year, a figure that represents stability from last month's report.
The US, Canada, Brazil, and China are anticipated to remain the principal contributors to this growing supply. Similarly, the forecast for next year’s oil supply growth was kept steady at 1.1 million barrels per day. The DoC refers to the group of OPEC members and non-OPEC nations working together. Additionally, the global economic growth rate has held steady at 3% for 2024 and 2.9% for 2025, which OPEC attributes to "solid growth" during the first three quarters of the year across most major economies.
The US economic growth forecast has been revised upward by 0.1 percentage point to 2.5%, reflecting a reassessment of first-half data. Meanwhile, the growth rate for 2025 remains unchanged at 1.9%. The US economy has benefited from robust consumer spending on services, despite the challenges posed by elevated interest rates.
"Non-OECD economies have generally outperformed expectations and are likely to continue this trend," the report detailed. Despite facing challenges in its real estate sector and domestic consumption, China’s export-driven segments are performing well, and recent stimulus measures implemented by the government are projected to bolster growth towards the 5% target for 2024..